Download Accounting Terms: Balance Sheet, Assets, Liabilities, and Closing Entries and more Quizzes Accounting in PDF only on Docsity!
classified balance
sheet
a balance sheet that was expanded by adding subsections for current assets: property, plant, equipment, and current liabilities TERM 2
current assets
DEFINITION 2 In accounting, a current asset is an asset on the balance sheet which is expected to be sold or otherwise used up in the near future, usually within one year, or one operating cycle whichever is longer. TERM 3
notes receivable
DEFINITION 3 Notes Receivable represents claims for which formal instruments of credit are issued as evidence of debt, such as a promissory note. TERM 4
fixed assets
DEFINITION 4 Fixed asset, also known as a non-current asset or as property, plant, and equipment (PP&E), is a term used in accounting for assets and property which cannot easily be converted into cash. -equipment -machinery -buildings -land TERM 5
current liabilities
DEFINITION 5 In accounting, current liabilities are often understood as all liabilities of the business that are to be settled in cash within the fiscal year or the operating cycle of a given firm, whichever period is longer. -A/P -W/P -I/P -unearned fees
long-term liabilities
Long-term liabilities are liabilities with a future benefit over one year, such as notes payable that mature longer than one year. -notes payable -mortgage payable -bond payable TERM 7
real accounts
DEFINITION 7 accounts that are relatively permanent from yr to yr TERM 8
temporary accounts
DEFINITION 8 accounts that report amounts for only one period TERM 9
when should temp. accounts have a balance
of zero
DEFINITION 9 beginning TERM 10
revenue and expenses accounts are
transferred to _________
DEFINITION 10 income summary
accounting systems
the methods and procedures for collecting, classifying, summarizing, and reporting a business' financial and operating information TERM 17
Internal controls
DEFINITION 17 In accounting and auditing, internal control is defined as a process effected by an organization's structure, work and authority flows, people and management information systems, designed to help the organization accomplish specific goals or objectives. TERM 18
processing methods
DEFINITION 18 policies and procedures that protect assets from misuse, ensure that business information is accurate, and ensure that laws and regulations are being followed TERM 19
subsidiary ledger
DEFINITION 19 The subledger, or subsidiary ledger, is a subset of the general ledger used in accounting. TERM 20
general ledger
DEFINITION 20 The general ledger, sometimes known as the nominal ledger, is the main accounting record of a business which uses double-entry bookkeeping.
controlling account
In accounting, the controlling account is an account in the general ledger to which a corresponding subsidiary ledger has been created. TERM 22
special journal
DEFINITION 22 Special Journals are designed to facilitate the process of journalizing and posting transactions. single kind of transaction that occurs frequently TERM 23
revenue journal
DEFINITION 23 used for recording fees earned on account TERM 24
cash receipts journal
DEFINITION 24 cash fees earned. every entry recorded in the cash receipts journal will involve a debit in the cash DR column TERM 25
purchases journal
DEFINITION 25 recording all purchases on account
sales returns and
allowances
granted by the seller to customers for damaged or defective merchandise TERM 32
sales discounts
DEFINITION 32 granted by the seller to the customer for early payment of amounts owed TERM 33
net sales
DEFINITION 33 determined by subtracting sales returns and allowances and sales discounts from sales TERM 34
purchase return
DEFINITION 34 buyer returns merchandise to seller TERM 35
purchase allowance
DEFINITION 35 buyer receives a reduction in the initial price @ which the merchandise was purchased
perpetual inventory
In business and accounting/accountancy, perpetual inventory or continuous inventory describes systems of inventory where information on inventory quantity and availability is updated on a continuous basis as a function of doing business. TERM 37
selling expenses
DEFINITION 37 incurred directly in the selling of merchandise -sales salaries -store supplies used -depreciation of store equipment - delivery expense -advertising TERM 38
admin. expenses
DEFINITION 38 incurred in the admin. or general operation of the business - office salaries -depreciation of office equipment -office supplies used TERM 39
other expense
DEFINITION 39 expenses that can not be traced directly to the normal activity of the business TERM 40
credit terms
DEFINITION 40 terms for when payments for merchandise are to be made. if payment is required on delivery, the terms are cash or net cash
