Chapter 5: The Accounting Cycle
This financial statement is used to summarize the operating results of a business by matching the revenue earned during a given period of time with the expenses incurred in generating that revenue.
What is the Income Statement?
This type of inventory system is a system of accounting for merchandising transactions in which the Inventory and Cost of Goods Sold accounts are kept up-to-date on a continuous basis.
What is a Perpetual Inventory System?
This account is a valuation account or contra-asset account relating to accounts receivable and showing the portion of the receivables estimated to be uncollectible.
What is the Allowance for Doubtful Accounts?
The Income Statement is sometimes referred to by other names. Name two.
What are: 1. Earnings Statement, 2. Statement of Operations, or 3. Profit & Loss (P&L) Statement?
This type of inventory system is a system of accounting for merchandising transactions in which the amounts of Inventory and Cost of Goods Sold are not known until a complete physical inventory is taken at year-end.
What is a Periodic Inventory System?
This is an analysis that explains the difference between the balance of cash shown in the bank statement and the balance of cash shown in the depositor's records.
What is a Bank Reconciliation?
When you subtract Cost of Goods Sold (COGS) from Revenue you arrive at this subtotal.
What is Gross Profit?
This is a sequence of transactions by which a business generates its revenue and cash receipts from customers.
What is the Operating Cycle?
What are Bad Debt Expense (Debit) and Allowance for Doubtful Accounts (Credit)?
To calculate a company's ending Retained Earnings you perform this calculation.
What is Beginning Retained Earnings + Net Income - Dividends?
In a periodic inventory system, we can use this formula to calculate Cost of Goods Sold (COGS).
What is:
Beginning Inventory
+ Purchases
--------------------------
= Cost of Goods Available for Sale
- Ending Inventory
--------------------------
= Cost of Goods Sold
?
A Bank Reconciliation explains why the Accounting System cash balance is different than the balance indicated in the Bank Statement. These are some examples for why the Accounting System and the Bank Statement might show different cash balances. Name two.
What are: 1. Outstanding Checks, 2. Outstanding Deposits, 3. Bank Collection Fees, 4. Service Charges, 5. NSF Checks?
This journal entry is used to zero out Temporary, Income Statement accounts and transfer their amounts to Retained Earnings.
What is a Closing Entry?
When a company physically counts its inventory at period end, it will compare its count for each inventory item to what?
What is the count recorded in the accounting system?
In accounting, we call short-term investments that are grouped with cash this.
What is marketable securities?