Accounting Terminology
Definition of Proving a Journal
What is checking the total number of debits to equal the total number of credits?
These are the four main special journals
What is 1) Cash Receipts Journals 2) Cash Disbursement Journal 3) Sales Journal 4) Purchases Journal?
The ability to produce more goods than another country.
What is absolute advantage?
Person who came up with the term "invisible hand"
What is Adam Smith?
The equation for Net Pay
What is Net Pay = Gross Pay - Deductions?
Property or items of value owned by a business
What is assets?
These are the 3 ways to determine Gross Earnings.
What is 1) Piece-Rate 2) Commission Payment 3) Hourly Pay?
System where the more you earn the higher the tax rates.
The effect on quantity demanded when the price of ice cream increases
What is decrease in quantity demanded?
Buying something and promising to pay it later.
What is credit?
Definition of Accounts Receivable and Accounts Payable
What is 1) Accounts Receivable: customers who purchased goods but will pay later. 2) Accounts Payable: suppliers who the company/business will pay in the future?
Name of the extra section on income statements of merchandising companies.
What is Cost of Goods Sold?
Frozen fish sticks compared to steak are considered this.
What is inferior good?
In this market, consumers input household expenditures and get goods and services.
What is product market?
Purpose of bank reconciliation
What is ensuring the bank's records of a company's finance match the company's record?
This involves testing business records and procedures for accuracy.
What is auditing?
Main similarity and the main difference between W-4 and W-2
What is a) Similarity: Both payroll tax documents b) Difference: W-4 is completed by Employee, W-2 is completed by Employer?
More stock does what to the price elasticity of supply
What is increases the price elasticity of supply?
Theories that try to explain this steady rise in prices include demand-pull and cost-push.
What is inflation?
Is a list of all accounts used by a business.
What is chart of accounts?
Steps in the accounting cycle.
What is 1) Identify Transactions 2) Record Transactions 3) Post to the General Ledger 4) Calculate Unadjusted Trial Balance 5) Make Adjusting Entries 6) Create Adjusted Trial Balance 7) Create Financial Statements 8) Make Closing Entries?
It is called this when a foreign company is owned by a parent company.
What is wholly owned subsidiary?
The optimal amount of pollution
What is when marginal benefit equals marginal cost?
All corporations must submit this tax form
What is 1120?