Chapter 9
The Accounting Equation
The Balance Sheet
The Income Statement
Random
100

Goods that a business purchases to sell.

What is merchandise?

100
Fill in the blank: The accounting equation is: _______ = Liabilities + Owners' Equity
What is assets?
100
Liabilities are categorized into two types of liabilities:
current liabilities long-term liabilities
100
Increases in a firm’s assets that result from the sale of goods, provision of services, or other activities intended to earn income.
What are revenues?
100

The owner of one or more shares of ownership in a company.

What is a stockholder?

200

A ledger that breaks down a controlling account into summarized individual accounts, also known as a subledger.

What is a subsidiary ledger?

200
The resources a business owns - such as cash, inventory, equipment and real estate
What are assets?
200
The ease with which an asset can be converted into cash
What is liquidity?
200
The total dollar amount of all goods and services sold during the accounting period
What are gross sales?
200

The journal entry that appears when a company pays cash for an expense.

What is debit for the expense and credit for cash?

300

A form requesting that a vendor sell merchandise to a business. Often listing the quantity desired and unit price.

What is a purchase order?

300
A system in which each financial transaction is recorded in two separate accounting entries to maintain the balance shown in the accounting equation
What is a double-entry bookkeeping system?
300
Assets that can be converted quickly into cash or that will be used within one year or less
What are current assets?
300
The actual dollar amounts received by the firm for the goods and services it has sold after adjustment for returns, allowances and discounts
What are net sales?
300

What special journal is used to record ONLY cash payment transactions.

What is cash payments journal?

400

A special journal used to record only purchases of merchandise on account.

What is a purchases journal?

400
The firm's debts -- i.e., Claims that outsiders have against firm’s assets
What are liabilities?
400

The process of apportioning the cost of a fixed asset over the period during which it will be used (i.e., recording the time fram the asset was used)

What are adjusting entries?

400
All business costs other than the cost of goods sold
What are operating expenses?
400

A company that is publicly owned that purchases merchandise to resell.

What is a corporate merchandising business?

500

The total on the schedule of accounts payable listing should match this account in the general ledger.

What is accounts payable?

500
The difference between total assets and total liabilities (i.e., what would be left for the owners if the firm's assets were sold and the money used to pay off its liabilities)
What is owners' equity?
500

Accounts that need to be closed at the end of each fiscal period.

What are temporary accounts?

500
The basic equation on which an income statement is based is:
What is Revenue - expenses = net profit?
500

The tax on a sale of merchandise or services.

What is sales tax?

M
e
n
u