Reconciliations
What is the primary goal of a bank reconciliation?
To ensure the company's book balance matches the bank statement balance
Which financial statement shows a company's financial position at a single point in time?
Balance Sheet
If you debit an asset account, what happens to its balance?
The balance increases
What does GAAP stand for?
Generally Accepted Accounting Principles
Name one common reason for a discrepancy between the cash book and bank statement.
Outstanding checks or deposits in transit
Where is unearned revenue reported on a balance sheet?
Liability
What is the accounting equation?
Assets = Liabilities + Equity
What is a contra account? Give an example
An account that offsets another account, e.g., Accumulated Depreciation (what are some others?!)
When reconciling accounts receivable, what does an aged receivables report help identify?
Overdue accounts or potential bad debts
Which report is used to compare activity for a given period to an organization's operating budget?
Budget vs. Actuals Report
What is the typical journal entry to accrue an expense?
Debit expense account, credit Accounts Payable
What is a suspense account used for?
Temporarily holding entries until they can be properly classified
What is an Amortization Schedule used to reconcile?
Loan accounts
Where does net income go at the end of a reporting year?
Retained Earnings
What is the standard journal entry to record a shareholder loan?
Debit Cash, Credit Loan from Shareholder
What account is debited when employer payroll taxes are accrued?
Payroll Tax Expense