Week 2 Review
Assets=Liabilities + Owner's Equity
What is the basic accounting equation?
A method of paying out the equity of a firm to shareholders.
What are dividends?
The reason why the short form for debit has an "r" in it.
What is the Latin origin?
Adjusting journal entries never involve this.
What is cash?
The umbrella term for accounts that usually have a debit balance.
What are assets?
Accounts payable belongs to this account group.
What is liability?
An asset that will be used within the year.
What is a current asset?
short-term also accepted
The three types of temporary accounts.
What are revenue, expenses, and dividends?
A person paying for a gym membership a year in advance is this type of adjusting entry.
What is deferred revenue?
The beginning balance of these accounts is 0.
What are temporary accounts?
The cut off point for which financial information is relevant.
What is materiality?
The recording of individual transactions that have occurred.
What are journal entries.
Expenses (part of equity) have this type of balance.
What is a debit balance?
Expenses that belong in the current period but have not yet been billed to the business.
What are accrued expenses?
Another term for income statement.
What is a profit and loss statement (PNL)?
Complete, neutrality, and freedom from error are part of this IFRS qualitative characteristics group.
What is faithful representation?
(Fundamental also accepted)
An area where all accounts are listed as being a debit or credit balance.
What is a trial balance?
Asset and expense accounts have the same natural balance as this type of account.
What is a withdrawal/dividend account?
Asset accounts that naturally carry a credit balance.
What is a contra asset account?
This financial statement contains only the sales revenue, cost of goods sold, and expense accounts.
What is the income statement?
Paint is purchased for $20,000.
A building is painted, fulfilling an $80,000 customer order. Payment is not received.
Employee wages of $10,000 are paid.
Under this accounting basis the net income for the period is $50,000.
What is the accrual basis?
The term used to describe whether or not an account would normally have a debit or credit balance (depending on the account).
What is the natural balance?
You sell 10 cars for $80,000 each on credit. The $800,000 transaction will impact these two accounts.
What are accounts receivable and retained earnings?
The chart that displayed the debits and credits for an account.
What is a "T" chart?
The term for converting a loan to company shares.
What is a convertible venture?