Principles and Business Structures
Business Entity, Going Concern, Accounting Period, and Revenue Recognition are all what?
Generally Accepted Accounting Principles (GAAP)
Assets = Liability + Equity
What is the accounting equation?
Increases with a debit
What is Drawing, Expenses, and Assets?
The top three lines on any financial report, in order, are
Company Name
Report Name
Date
Restrictive, blank, and special
What are check endorsements?
This type of ownership is its own legal entity
Corporation
A creditor's financial claim to assets. A debt.
What is a liability?
Increases with a credit
What are Liabilities, Equities, and Revenue?
The elements of the income statement include
What are revenue, expenses, and Net income (loss)
What is opportunity, pressure, and rationalization?
The three different types of businesses are
Service, merchandising, and manufacturing
These are used for cash purchases and this document is used when things are paid for with cash.
What are checks and receipts?
The side of the account in which the balance of the account will increase.
What is normal balance?
Beginning capital + investments +/- net income (net loss) - withdrawals/drawing
What is how to calculate the ending capital balance
Segregation of duties, using a cash register, and daily cash deposits are all examples of
What are internal controls?
This type of ownership has one owner, while in this type of ownership, all control and reward are split equally among its owners.
What is an invoice?
Finish the journal entry:
A customer paid off a $400 invoice that was previously billed
DR Cash $400
What is CR Accounts Receivable $400
Asset = Liabilities + Owner's Equity
What is the balance sheet?
What is reconciliation?
The seven steps of the accounting cycle are
1. Analyze transactions
2. Journalize
3. Post to GL
4. Trial Balance
5. Financial statements
6. Post-closing Entries
7. Post-closing Trial Balance
When other source documents are not available or are not produced, this is created for evidence of a transaction.
What is a memorandum?
The correct journal entry for receiving a $50 bounced (NSF) check from a customer. (The check ONLY - do not include the fees, etc)
DR Accounts Receivable $50
CR Cash $50
What is the Net Income (Loss) comes from the balance sheet and is used to calculate the ending capital balance. The ending capital balance is then used to update the owner's equity section of the balance sheet.
This type of deposit has been recorded in your cash ledger but has not been received by the bank
deposit in transit