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Accounting Terms: Balance Sheet, Assets, Liabilities, and Closing Entries, Quizzes of Accounting

Definitions for various accounting terms related to the balance sheet, including current assets, fixed assets, current liabilities, and long-term liabilities. It also covers the concept of real and temporary accounts, the steps for closing entries, and the difference between a fiscal year and a natural year. Additionally, it discusses the importance of internal controls and processing methods in accounting systems.

Typology: Quizzes

2009/2010

Uploaded on 10/21/2010

demetrious26
demetrious26 🇺🇸

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TERM 1
classified balance
sheet
DEFINITION 1
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
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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