Generally Accepted Accounting Principles
A set of rules, standards, and procedures that govern how financial information is recorded and reported in the United States
What is GAAP
What is the foundation of the entire accounting system
Assets = Liabilities + Equity (A=L+E)
Documents that provide evidence of a financial transaction
What is Source Documents
Assets, Liabilities and Capital (Owner's Equity) are all...
What are Permanent Accounts
The digital process of moving money between bank accounts, replacing traditional paper checks
What is EFT
The principle that requires expenses to be recorded in the same period as the revenues they help generate
What is Matching Principle
Financial Statement that shows a company's financial position on a specific date
What is a Balance Sheet
The Normal Balance of an account is...
What is the Increase side of the account
The 2 main objectives of the Closing Process are...
What is: 1. reset temporary accounts to zero, and 2. update Ending Capital Balance
A signature or a stamp that is placed on the back of a check to show the transfer of ownership
What is Endorsement
The principle that requires revenue to be recorded when it is earned, and not necessarily when cash is received
What is Revenue Recognition
True or False: Assets are what a company owes and Liabilities are what a company owns
What is False
The diary of a business where every transaction is recorded first, in the order it happens
What is General Journal
Accounts listed on a Post-Closing Trial Balance
What is Permanent Accounts (Balance Sheet Accounts), Assets, Liabilities and Capital (Equity)
2 reconciling items not included in the bank statement balance, which do not require a journal entry
What is 1. Outstanding Checks, and 2. Deposits in Transit
What are the 3 basic types of businesses
What is Service, Merchandising and Manufacturing
This occurs when expenses exceed revenue
What is Net Loss
An internal accounting report that lists the ending balances of all general ledger accounts, with total debits equal to total credits
What is Trial Balance
Closing entries steps 1 and 2
What is 1. Close Revenue to Income Summary, and 2. Close Expenses to Income Summary
Journal entry to establish a petty cash fund
What is Debit Petty Cash, Credit Cash
What are the 3 business structures
What is Sole Proprietorship, Partnership and Corporation
What 3 elements change the Capital balance
What is Net Income or Loss, Drawings or Dividends and an owner's investments into the company
A numbered and categorized list of all the financial accounts a company uses to record transactions in its general ledger
What is Chart of Accounts
Accounts that track short-term financial performance and measure a company's net income or loss for a specific period
What is Temporary Accounts
Journal entry to replenish Petty Cash
What is Debit Expenses, Credit Cash