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Flashcards in Structure of Accounting Deck (32)
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1

What are the 2 components of "equity"?

1. Paid in Capital (PIC)
2. Retained Earnings (R/E)

2

What are the 2 components of retained earnings?

1. Revenues
2. Expenses

3

What are the five basic elements of accounting? (ALERE)

1. Asset
2. Liability
3. Equity
4. Revenue
5. Expense

4

Asset is used to generate _______ (definition of assets)

Future cash; Future economic benefit

5

On a T Table, what goes on the left side?

Asset, Expense

6

On a T Table, what goes on the right side?

Liability, Equity, Revenue

7

Liability is ______ of ______ (defintion)

Outflow; Asset

8

Net asset is ______ minus ______

Revenue; Expenses

9

What are the 3 types of companies? (SMM)

1. Service
2. Merchandising (retailers)
3. Manufacturing

10

What are the 2 types of "trade payables" (AN)

1. Accounts payable
2. Notes payable

11

What are the 2 types of "non-trade payables" (OB)

1. Others payable
2. Borrowing

12

Revenue is the _____ of assets

Quick receipt (immediately liquefiable)

13

What are the basic steps of a transaction?

1. Receipt of quick assets (e.g., cash receivable)
2. Completeness of obligation
3. Earned or Unearned revenue

14

What are the two types of "receivables?"

1. Trade receivable
2. Non-trade receivable

15

Expenses include both _____ and _____

Paid; Payable (depends on whether asset has been consumed)

16

What are the 2 types of journalizing "inventory"?

1. First in, First Out
2. Weighted Average

17

(Inventory) For Perpetual Inventory System, newly acquired inventory needs a new account called ____

Purchase

18

(Inventory) For Periodic Inventory System, all inventory (previously existing or newly acquired) goes under account called _______

Merchandise

19

(Inventory) When involving SALES and payments are received IN ADVANCE, you should record ______ in CR

Advanced (from "name of customer")

20

Revenue is _____, whereas Gain is ______

Repetitive revenue; One-time revenue

21

Expense is ____, where as Loss is _____

Repetitive; One-time

22

"Let the _____ follow the ______"

Expense; Revenue

23

What are the 3 types of expenses? (CSI)

1. Causal relationship (e.g., COGS-sale)
2. Systematic & Rational Allocation (e.g., depreciation)
3. Immediate Recognition (e.g., insurance, supplies, salaries, etc.)

24

What are the 3 types of "depreciation"?

1. Physical/Actual usage method (actual use/total use)
2. By time (straight line depreciation)
3. Accelerated method

25

What does "IFRS" stand for?

International Financial Reporting Standard

26

Accounting information must be _____ and ______

Relevant (probable); Faithful (measurable with certainty)

27

The only way that liabilities may be reduced is to reduce ______

Unearned revenues (i.e., reduced payables, etc.)

28

Total non-owner changes in equity (comprehensive income) is ______ plus _______

1. Net income
2. OCI

29

What are the 4 types of OCIs?

1. Available-for-sale securities
2. Pension
3. Derivatives
4. Translation gain/loss (forex)

30

R/E = ?

Prior R/E - Dividends + Net Income