Financials
This statement provides a snapshot of a company's financial position at a specific point in time.
What is the Balance Sheet?
This principle requires that expenses be recorded in the same period as the revenues they help generate.
Matching Principle
This form is used by individuals to file their annual income tax return in the United States.
What is Form 1040?
The process of allocating the cost of a tangible asset over its useful life.
What is Depreciation?
This tax credit is available for qualified education expenses and can be claimed for up to $2,500 per student.
What is the American Opportunity Credit?
The Balance Sheet equation is Assets = Liabilities + Equity, This is also known as.
What is the Accounting Equation?
The accounting concept where assets are recorded at their original cost rather than their market value.
What is the Historical Cost Principle?
This type of payment, often made to support a taxpayer’s spouse or children following a divorce, is typically not taxable.
What are Alimony Payments?
The accounting term for an expense that has been incurred but not yet paid or recorded.
What is an Accrued Expense?
This tax deduction allows homeowners to deduct interest paid on their mortgage.
What is the Mortgage Interest Deduction?
This ratio compares a company’s total debt to its total equity to evaluate financial leverage.
What is the Debt-to-Equity Ratio?
This type of account increases with a credit and decreases with a debit.
What is a Liability or Revenue account?
The IRS typically requires taxpayers to keep records for this many years from the date of filing a tax return.
What is three years? (7 years if you file a claim for a loss from worthless securities or bad debt deduction.)
A system of accounting that records revenues and expenses when they occur, regardless of when cash transactions happen.
What is Accrual Accounting?
This tax credit can be claimed by individuals who contribute to a retirement plan and meet certain income requirements.
What is the Retirement Savings Contributions Credit (Saver’s Credit)?
The section on the Balance Sheet that includes items like cash, accounts receivable, and inventory.
What is Current Assets?
This principle requires that financial statements should be prepared with consistency and clarity so users can understand them.
What is the Principle of Consistency and Transparency?
This form is used by businesses to report income, deductions, and other information to the IRS.
What is Form 1120 (for corporations) or Form 1065 (for partnerships)?
This represents the money owed to the company by customers for sales made on credit.
What are Accounts Receivable?
This deduction allows taxpayers to deduct medical expenses that exceed a certain percentage of their adjusted gross income (AGI).
What is the Medical and Dental Expenses Deduction?
This section of the Cash Flow Statement shows cash flows from core business operations.
What is Operating Activities?
This analysis helps managers understand the effects of changes in costs and volume on a company's operating income.
What is Cost-Volume-Profit Analysis?
This ratio measures a company’s ability to pay its short-term obligations with its most liquid assets.
What is the Current Ratio?
The process of examining financial statements to ensure their accuracy and compliance with accounting standards.
What is an Audit?
This deduction allows for the deduction of charitable contributions made to qualified organizations
What is the Charitable Contribution Deduction?