Financial Statements
This financial statement provides a snapshot of a company's financial position at a specific point in time.
What is the Balance Sheet?
This Income Statement Account increases with a debit and decreases with a credit.
What is an Expense
This principle requires that expenses be recognized in the same period as the revenues they help generate.
What is the Matching Principle?
These entries are prepared to close temporary accounts at the end of an accounting period.
What are Post-Closing Entries?
Method for assigning inventory cost to sales; the cost of available-for-sale units is divided by the number of units available to determine per unit cost prior to each sale, which is then multiplied by the units sold to yield the cost of that sale.
What is weighted average
This financial statement shows a company's revenues and expenses over a period of time.
What is the Income Statement?
These balance sheet accounts increases with a credit and decreases with a debit
What are liabilities and capital.
The principle requires that businesses record revenue when it's earned (accrual accounting) rather than when payment is received (cash accounting).
What is the revenue recognition principle?
Matches estimated loss from uncollectible accounts receivable against the sales they helped produced.
Allowance Method
an asset-management and valuation method in which assets produced or acquired first are sold, used, or disposed of first.
What is FIFO
This financial statement summarizes the changes in a company's equity over a period.
What is the Statement of Owner's Equity?
This type of account has current or future economic value to a business.
What is an asset?
An accounting concept that dictates that companies report expenses at the same time as the revenues they are related to.
What is the matching principle?
A contra asset account that reduces Accounts Receivables.
A system used to track and record stock levels, in which every purchase and sale of stock is logged automatically and immediately.
What is perpetual inventory system.
This statement summarizes the amount of cash and cash equivalents entering and leaving a company.
Cash Flow Statement
Revenue accounts on the income statement are increased with this entry.
What is a credit
To ensure that a company’s financial statements are complete, consistent, and comparable.
What are accounting principles?
Process of allocating the cost of a plant asset to expense while it is in use.
What is Depreciation?
In an inflationary period, this inventory costing system allows those higher costs to be reported on the current year's tax return, thereby increasing the COGS amount and reducing taxable income.
What is LIFO
This report contains additional information from the four financial statements to help readers understand the existing financial reports.
Notes to Financial Statements
Standards that encompass the details, complexities, and legalities of business and corporate accounting
What is GAAP, Generally Accepted Accounting Principles?
Charges more depreciation in early years and less depreciation in later years.
What is double declining balance?
(Current Assets - Inventory) / Current Liabilities
What is the quick ratio or acid test ratio.