Chapter 5
A signature or stamp on the back of a check transferring ownership.
Endorsement
Anything of value that is owned
Asset
he area of accounting that focuses on reporting information to external
users
Financial Accounting
The difference between total revenue and total expenses when total revenue is
greater
Net Income
The series of accounting activities included in recording financial information for a fiscal period
Accounting Cycle
A check that cannot be processed because the maker has made it invalid.
Voided Check
The principles of right and wrong that guide an individual in making decisions
Ethics
The area of Accounting that focuses on reporting information to internal users.
Managerial Accounting
The length of time which a business summarizes its financial information and
reports its financial performance
Fiscal Period
Journal entries used to prepare temporary accounts for a new fiscal period
Closing Entries
A check which has been paid by the bank
Canceled Check
Amounts that are owned to others must be identified and assigned values. It is an
amount owed
Liability
The ratio of net income to total sales.
Return On Sales (ROS)
Cash paid for an expense in 1 fiscal period that isn’t used until a later date
Prepaid Expense
Accounts used to accumulate information until it is transferred to the owner's capital account
Temporary accounts
A bank card that automatically deducts the amount of a purchase from the checking
account of the cardholder
Debit Card
Financial reports that summarize the financial condition and operations of
a business
Financial Statements
A financial statement that reports the changes in the capital
account for a proprietorship for a period of time
Statement of Owner’s Equity
A financial statement that reports the value of a business’s assets, liability, and
owners equity accounts
Balance sheet
A trial balance prepared after the closing entries are posted
Post-closing trial balance
A form showing proof of a petty cash payment
Petty Cash Slip
The difference between assets and liabilities
Equity
The calculation and interpretation of a financial ratio
Ratio Analysis
A financial statement that shows the revenue and expenses for a fiscal period.
Income Statement
Accounts used to accumulate information from one fiscal period to the next
Permanent accounts