Accounting 101
Accounting is referred to as "the language of business." This is the accounting language used by external users.
What is financial accounting?
These are items owned by a business that have monetary value.
What are assets?
These 3 items, in a specific order, are found at the top of financial statements.
What are 1) Name of business, 2) Name of the financial statement and 3) Statement date?
This is what GAAP stands for.
What are Generally Accepted Acounting Principles?
This is the source document for written instructions from the owner to the accountant about purchases made for the business.
What is a memorandum?
Managerial, or management accounting is the language for these users of accounting.
Who are internal users?
This is the Balance Sheet equation.
What is the Accounting Equation or A = L + OE?
This is the third financial statement prepared at the end of an accounting period.
What is the Balance Sheet?
This GAAP requires a source document as evidence or proof of a business transaction.
What is Objectivity?
This is the process of officially recording balanced business transactions in accounting records.
What is journalizing?
These are the three legal forms a business may take.
What are 1)sole proprietorships, 2)partnerships, and 3)corporations?
The amount of liabilities if assets are $2,000 and owner's equity is $500.
What is $1,500?
The Income Statement and the Balance Sheet are prepared from this worksheet.
What is the six-column worksheet?
One business partner is violating this GAAP when he continually charges the processing of his family vacation photos to the business.
What is the GAAP Entity?
The effect on equity when an owner withdraws cash from the business.
What is a decrease in equity?
This is the left side of a T-account.
What is Debit?
This is the difference between total assets and total liabilities.
What is Owner's Equity?
This symbol indicates the final total on a financial statement.
What is a double-rule?
When a company who purchases office supplies such as paperclips and staples does not record the related expenses for each paperclip or staple used, they are following this GAAP.
What is the GAAP Materiality?
The accounting phrase used for net income on the Income Statement.
What is "in the black."
This is the method that states every accounting transaction will affect at least two accounts.
What is the double-entry method?
Account on the balance sheet that represents the amount owed for purchasing supplies on credit.
What is Accounts Payable (AP)?
This is calculated on the first financial statement prepared at the end of an accounting period to determine a business's profitability.
What is net income or net loss.
Changing from a monthly reporting period to a quarterly reporting period without a justifiable or documented reason violates this GAAP?
What is the GAAP Consistency?
The normal balance of an unearned revenue account.
What is credit?