Accounting Basics
Accounts!
Methods
Linda, It dosent add up
Matching
100
is any financial event that would impact the account balances of a company's financial statements. Every time the company uses or receives cash, or adjusts an entry in its accounting records this is happening
What is Accounting Event?
100
are journal entries made at the end of an accounting cycle to update certain revenue and expense accounts and to make sure you comply with the matching principle. The matching principle states that expenses have to be matched to the accounting period in which the revenue paying for them is earned.
What is Adjusting Entries?
100
o delay recognizing certain revenues or expenses on the income statement until a later, more appropriate time
What is Defferals
100
first-in, first-out, meaning that the oldest inventory items are recorded as sold first but do not necessarily mean that the exact oldest physical object has been tracked and sold. In other words, the cost associated with the inventory that was purchased first is the cost expensed first.
What is FIFO
100
Principle requires that expenses incurred by an organization must be charged to the income statement in the accounting period in which the revenue, to which those expenses relate, is earned.
What is Matching Of Revenue?
200
is the accounting classification of an account. It is part of double-entry book-keeping technique. An account has either credit (Abbrev. CR) or debit (Abbrev.
What is Normal Balance?
200
is a journal entry made at the end of an accounting period to transfer the temporary account balances to the permanent accounts. In other words, these entries zero out or close temporary accounts and move their balances to permanent accounts to be carried forward to the next period.
What is Closing Accounts?
200
s a system of inventory in which updates are made on a periodic basis. This differs from perpetual inventory systems, where updates are made as seen fit.
What is Periodic Inventory System
200
the acronym for last-in, first-out. It is a cost flow assumption that can be used by U.S. companies in moving the costs of products from inventory to the cost of goods sold. Under LIFO the latest or more recent costs of products purchased (or produced) are the first costs expensed as the cost of goods sold.
What is LIFO
200
e matching principle states that expenses should be recorded during the period in which they are incurred, regardless of when the transfer of cash occurs.
What is Matching Of Expense?
300
an entry recording a sum received, listed on the right-hand side or column of an account.
What is Credit?
300
The event that results in revenue that is recorded by the accounting methods when it is received and realized
What is Revenue Event
300
Updates inventory accounts after each purchase or sale. Inventory subsidiary ledger is updated after each transaction. Inventory quantities are updated continuously.
What is Perpetual Inventory System?
300
the cost to replace the assets of a company or a property of the same or equal value
What is Replacement Cost
300
The current amount of a product that a business has in stock.
What is Inventory Level?
400
an entry recording an amount owed, listed on the left-hand side or column of an account.
What is Debit?
400
This is an event where the business has to spend money, i.e new materials, workforce, fixed and variable costs
What is Expense Event
400
Records an invoice at full price without regard to any cash discounts offered. In other words, this method assumes that the customer will not take advantage of the cash or early payment discount. It records the invoice at the gross price and adjusts for the discount later if the discount was taken.
What is Gross Price Method?
400
When you estimate your cost of goods sold as more than they are
What is Overstated Cost Of Goods Sold
400
A cash sale affects which financial statements?
What is IS,BS, SCF
500
also called a real account, is a balance sheet account that is used to record activities that relate to future periods. The reason they are called this is because they are never closed at the end of an accounting period.
What is Permanent Accounts?
500
in finance, the adding together of interest or different investments over a period of time. It holds specific meanings in accounting, where it can refer to accounts on a balance sheet that represent liabilities and non-cash-based assets
What is Accrual Accounting
500
Initially records the purchase at net price (i.e. gross price less the potential discount). If the discount is availed, the journal entry is to debit accounts payable for the net price and credit cash. If the buyer fails to make payment within the discount period, the journal entry is to debit accounts payable for the net price, debit purchase discounts lost for the discount which could be availed and crediting cash for the
What is Net Price Method
500
When the cost of goods you report is less than you actually sold
What is Understated Cost Of Goods Sold.
500
You use this method to pay less taxes.
What is LIFO
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