SlimStuderen B: Analysis of Transactions Flashcards Preview

Financial Accounting Part 1 > SlimStuderen B: Analysis of Transactions > Flashcards

Flashcards in SlimStuderen B: Analysis of Transactions Deck (23)
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1

Transactions

Any event that has a financial influence on the business. Reflects increases or decreases

2

Every transaction has to be recorded based on a...

Double-entry accounting system

3

Account

Holds records for all changes in certain liability, asset or shareholder's equity during certain time period

4

Cash

Any medium of exchange

5

Accounts receivable

Account where all future cash collections are stated

6

Notes receivable

More binding than accounts receivable, promissory note signed

7

Inventory

Amount of products the company has on stock

8

Prepaid expenses

Paid for certain items in advance, such as rent or insurance. Assets because represent future economic benefit for company

9

PPE

Property Plant Equipment - Assets which are expected to be used for more than one period for production or supply of goods or services
e.g. land, buildings, fixtures, furniture, equipment

10

Accounts payable

Promise to pay a debt arising from a purchase at credit

11

Notes payable

Amount the company must pay to another person or company because it signed notes promising to do it in the future

12

Accrued liabilities

Expense that the company has not yet paid for.
e.g. interest payable and salary payable

13

Share capital

Total owners investment in the company

14

Retained earnings

Cumulative net income earned by a company over its lifetime, minus cumulative net losses and dividends

15

Dividends

Dividend payouts to shareholders, decreases retained earnings

16

Double entry accounting

Every transaction affects at least two accounts, T-account

17

Debit and credit increases and decreases

Assets - Increase=Debit Decrease=Credit
Liabilities - Increase=Credit Decrease=Debit
Shareholders equity - Increase=Credit Decrease=Debit

18

Ledger

Grouping of all T-accounts with their balances

19

Trial balance

Sates all accounts with their balances

20

Slide (error)

$40 written as $400

21

Transposition (error)

$1,200 written as $2,100

22

Debit accounts

Assets, Dividends, Expenses

23

Credit accounts

Liabilities, shareholders equity overall, share capital, retained earnings, income