Dollar amount of coins, paper money, funds in bank.
What is cash?
100
The accounting equation. Also known as the formula for the balance sheet.
What is Assets = Liabilities + Equity?
100
Net Income = Revenues - Expenses.
What is the Income Statement Equation.
100
DCC's owner paid $10,000 cash to acquire 200 of DCC's common shares. To record this, you would debit cash and credit this account.
What is Common Stock?
100
A summary of all account names (and account numbers) used to record financial results in the accounting system.
What is the Chart of Accounts?
200
Owed to suppliers for goods or services bought on credit.
What is accounts payable?
200
Resources presently owned by a business that generates future economic benefits.
What is an Asset?
200
Any costs of operating the business, incurred to generate revenues in the period covered by the income statement.
What is an Expense?
200
DCC paid $1,000 to the landlord for rent. In order to record this, you could credit cash and debit this account.
What is Rent Expense?
200
Assets and liabilities should be initially recorded at their original cost to the company
What is the Cost Principle?
300
Cost of paper, pens, business forms, etc.
What are supplies?
300
The left side of an account, or the act of entering an amount into the left side of an account.
What is a Debit?
300
This basis of accounting requires recording revenues when earned and expenses when incurred, regardless of the timing of cash receipts or payments.
What is the accrual basis?
300
DCC ran advertising in the local newspaper that cost $500, but will not pay until next month. For this entry we debit advertising expense and credit this account.
What is accounts payable?
300
Used to record the effects of each day's transactions; organized by date.
What is a Journal?
400
Accumulated earnings (not yet distributed as dividends).
What is retained earnings?
400
To be used up or converted into cash within 12 months of the balance sheet date.
What are current assets?
400
Revenues increase net income, which increases retained earnings—Retained earnings then increases this type of account.
What is Stockholders' Equity?
400
DCC received cleaning supplies costing $2,000 today, but pays for them next month. To record this entry, we debit this account.
What is Supplies?
400
An internal report, prepared before end-of-period adjustments, listing the unadjusted balances of each account.
What is the unadjusted trial balance?
500
A contra-asset account that decreases the value of a property, plant and equipment asset.
What is Accumulated Depreciation?
500
A balance sheet that shows a subtotal for current assets and current liabilities.
What is a Classified Balance Sheet?
500
Assumes that the long life of a company can be divided into shorter time periods, such as months, quarters, and years.
What is the time period assumption?
500
Customers paid $200 cash to DCC to obtain gift cads that they could use for future cleaning services. To record this entry, you debit cash and credit this account.