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This account represents money a business owes to suppliers or creditors.
Answer: What is Accounts Payable?
These entries are made to ensure financial statements are accurate at the end of a period.
Answer: What are adjusting entries?
These types of accounts include revenues, expenses, and drawings.
Answer: What are temporary accounts?
Cash received from customers is classified as this type of activity.
Answer: What is an operating activity?
GAAP stands for this set of accounting standards.
Answer: What are Generally Accepted Accounting Principles?
Supplies are classified as this type of account because they provide future economic benefit.
Answer: What are Assets?
This is an example of an accrued expense.
Answer: What are wages owed but not yet paid?
Assets fall under this category of accounts.
Answer: What are permanent accounts?
Cash paid to purchase equipment is classified as this type of activity.
Answer: What is an investing activity?
Consistency in accounting means doing this over time.
Answer: What is using the same accounting methods?
Unearned revenue is a liability because it represents this
Answer: What is an obligation to perform services?
This is an example of a prepaid expense.
Answer: What is rent paid in advance?
This financial statement shows changes in owner’s equity over a period.
Answer: What is the statement of retained earnings?
Cash received from issuing stock is classified as this type of activity.
Answer: What is a financing activity?
Materiality means information should be disclosed if it does this.
Answer: What is affects decision making?
Depreciation is used to do this to a long-term asset’s cost.
Answer: What is allocate the cost over its useful life?
Closing entries are used to do this at the end of an accounting period.
Answer: What is transfer temporary account balances to equity?
This financial statement is prepared first in the accounting cycle.
Answer: What is the income statement?
Internal controls are designed primarily to do this.
Answer: What is prevent errors and fraud?
The time period assumption allows businesses to do this.
Answer: What is divide activities into specific time periods?
This account records the cost of using long-term assets during a period.
Answer: What is Depreciation Expense?
Accumulated depreciation is best described as this type of account.
Answer: What is a contra-asset?
The statement of cash flows reports cash flows from these three activities.
Answer: What are operating, investing, and financing activities?
Separation of duties means this in a business.
Answer: What is tasks are divided among different employees?
The business entity assumption requires this separation.
Answer: What is owner and business finances are separate?