What do these things have in common?
Journalize entries in the general journal, post entries to general ledger, prepare adjusting entries, prepare an adjusted trial balance
Steps in the Accounting Cycle
What is the item on the income statement that's considered a noncash expense directly tied to fixed assets
Depreciation
Over time, the "supplies" account converts to _______ ________.
Supplies expense
Company has $300,000 in total liabilities and $250,000 in total stockholder's equity. How much are total assets?
$550,000
Debit accounts receivable, credit sales.
Made a sale on account.
What type of an account is prepaid rent?
Asset
Revenues, expenses, gains, lossses, dividends
They are all temporary accounts (or they all close at the end of the period, or they are all part of retained earnings)
What does GAAP stand for?
Generally Accepted Accounting Principles
the difference between sales revenue and __________________ equals gross profit (or gross margin)
cost of goods sold (or cost of merchandise sold)
Which financial statements show a "snapshot" in time?
Balance sheet
Debit cash, credit note payable.
Borrowed some money.
When you credit allowance for doubtful accounts, what account would you typically debit (as part of the same journal entry)?
Uncollectible accounts expense (bad debt expense)
Allowance for doubtful accounts and accumulated depreciation
They are both contra accounts (specifically, contra assets)
What is owners' claim to assets?
Stockholder's equity.
When shipping terms are FOB destination, the ______ is responsible for the shipping costs.
Seller.
What are the three categories on the statement of cash flows?
Operating, Investing, and Financing
Debit unearned rental revenue, credit rental revenue.
Have earned and will now recognize some revenue that a customer had prepaid you for.
Name a contra-equity account
Treasury Stock
Liabilities, revenues, gains, and common stock
All have normal credit balances
Stock that is repurchased by the company from its shareholders.
Treasury Stock
In an accrual basis accounting system, expenses are recognized when they are __________.
Incurred.
What are the three types of adjusting journal entries?
Prepayments (deferrals), accruals, and estimates
Debit allowance for doubtful accounts, credit accounts receivable.
Wrote off an uncollectible account (or accounts).
What type of an account is accrued salaries?
Liability
Par value of common/preferred stock and additional paid in capital for common/preferred stock
All part of "Paid in Capital"
What's the definition of a "normal balance"?
How you increase an account.
If you sold some land for $250 that you had originally paid $400 for, you will debit cash for $250, debit ____ for $150, and credit land for $400.
"Loss on sale of land"
Company has 5,000 shares authorized, 2,000 issued, and 2,000 outstanding. How many shares of treasury stock does it have?
0
Debit dividends, credit dividends payable.
Declared dividends.
The account that holds the liability for services to be provided to a customer is called ____________ .
Unearned revenue (or deferred revenue)