Accounting 101
Amounts due from customers
What is accounts receivable?
The procedure for transferring information from a journal entry to a ledger account is
What is posting?
A business form giving written acknowledgement for cash received.
What is a receipt?
The difference between total revenue and total expenses when total revenue is greater.
What is net income?
Sales revenue less cost of goods sold
What is gross margin (gross profit)?
Another word for borrower
What is a maker or debtor?
The length of time for which a business summarizes financial information and reports its financial performance.
What is a fiscal period?
An expense that has been incurred but not yet paid
What is an accrued liability?
Cash paid for an expense in one fiscal period that is not used until a later period.
What is prepaid expense?
Assuring that financial statements contain all information necessary to understand a business’s financial condition is an application of the accounting concept
What is Adequate Disclosure?
Reporting income when the cash is received and expenses when the cash is paid.
What is cash basis of accounting?
Determining that the amount of cash agrees with the accounting records is
What is proving cash?
A form describing the goods or services sold, the quantity, the price, and the terms of sale.
What is an invoice?
Preparing financial statements at the end of each monthly fiscal period is an application of the accounting concept
What is Accounting Period Cycle?
Statement measuring operating performance
What is an income statement?
Original cost less accumulated depreciation
What is book value?
If an error requires a correcting entry, the source document describing the correction to be made
What is a memorandum?
A business paper from which information is obtained for a journal entry.
What is a source document?
When preparing a statement of owner’s equity, the amount of current owner’s capital is calculated using amounts obtained from
What is the work sheet?
Statement that is as of one specific date
What is a balance sheet?
An equation showing the relationship among assets, liabilities, and owner’s equity.
What is the accounting equation?
Financial reports that summarize the financial conditions and operations of business.
What are financial statements?
Proportion of total liabilities to total assets
What is the debt ratio?
A proof of the equality of debits and credits in a general ledger.
What is trial balance?
Can use either direct method or indirect method
What is statement of cash flow?