Introduction to Financial Accounting
This is known as the "language of business" used to communicate financial information.
What is accounting?
This financial statement shows a company's assets, liabilities, and owners' equity at a specific point in time.
What is the balance sheet?
This first step in the accounting cycle involves capturing economic events in written form.
What is journalizing?
This type of entry is made to record revenues earned but not yet received or recorded.
What is an accrued revenue adjusting entry?
This type of accounting information is primarily intended for use by external parties like investors and creditors.
What is financial accounting?
The fundamental accounting equation that underpins the balance sheet.
What is Assets = Liabilities + Owners' Equity?
A list of all accounts and their balances at a particular date, ensuring debits equal credits.
What is a trial balance?
This entry records the depreciation expense for assets like equipment or buildings at the end of the accounting period.
What is an adjusting entry for depreciation?
The concept that ensures financial statements represent a company’s financial position fairly, avoiding material misstatements.
What is integrity in financial reporting?
This type of entry is made to update the balances of accounts at the end of an accounting period to reflect unrecorded economic events.
What are adjusting entries?
The process of transferring journal entry amounts to the appropriate ledger accounts.
What is posting?
This statement includes all account balances after adjusting entries have been made and is used to prepare the financial statements.
What is an adjusted trial balance?
Identify one of the professional organizations responsible for the development and governance of accounting standards in the U.S.
What is the Financial Accounting Standards Board (FASB)?
These two types of entries record depreciation and allowance for doubtful accounts.
What are adjusting entries?
This is the name for the process where a company records a business transaction by identifying accounts affected and determining if they are debited or credited.
What is journalizing?
This principle ensures that expenses are recorded in the same period as the revenues they help generate, often requiring adjusting entries.
What is the matching principle?
This principle states that revenues should be recorded when they are earned, not necessarily when cash is received.
What is the revenue recognition principle? Or, what is accrual accounting?
This principle dictates that expenses should be matched with the revenues they help generate in the same accounting period, ensuring accurate financial reporting.
What is the matching principle?
The term for the complete set of accounts that a company uses to record its transactions.
What is the general ledger?
An entry that reduces unearned revenues and recognizes them as earned when the service is provided is known as this.
What is an adjusting entry for unearned revenue?