Classification
Fees Earned
What is Revenue?
Rent Expense
What is an Income Statement?
The account where the value of supplies used during a fiscal period is recorded
What is Supplies Expense?
If we had sales last year of $200,000 and sales this year of $600,000, what is the percent increase in sales?
What is 200 percent?
Financial information is recorded and reported separately from the owner's personal financial information.
What is Business Entity?
Cash Short
What is an Expense?
Accounts Receivable
What is a Balance Sheet?
The value of Income Summary equals this after the first two closing entries are recorded
Net Income/Loss
The current ratio is considered acceptable if it is larger than this number.
What is one?
Changes in financial information are reported for a specific period of time in the form of financial statements.
Accounting Period Cycle
Accumulated Depreciation - Equipment
What is a Contra Asset?
Drawing Account
What is the Statement of Owner's Equity?
The balance of the capital account should be equal to this after closing entries are posted.
What is the balance of capital on the balance sheet (or Statement of Owner's Equity ending balance)
This directional analysis occurs when total expenses are compared to total revenue on the income statement.
What is vertical analysis?
Recording expenses incurred in the same fiscal period as the revenue earned.
What is Matching Revenue and Expenses?
Unearned Rent
What is a Liability?
Net Income/Net Loss
What are the Income Statement and the Statement of Owner's Equity?
Adjusting entry for the portion of unearned rent that has been earned.
What is debit unearned rent (L) and credit earned rent (R)
This ratio is calculated by dividing total liabilities by total owner's equity.
What is the debt-to-equity ratio?
Financial statements contain all information necessary to understand a business's financial condition.
What is Adequate (Full) Disclosure?
Income Summary
Owner's Equity
Accumulated Depreciation - Equipment
Balance Sheet
Adjusting entry for the portion of salaries that have been earned, but not yet paid.
What is debit salaries expense and credit salaries payable?
This directional analysis occurs when the total sales from the current year are compared to the total sales from the prior year.
What is Horizontal Analysis?
The same accounting principles must be followed in the same way in each accounting period.
What is Consistent Reporting?