Terms
Planning, Recording, Analyzing, and Interpreting Financial Information
What is Accounting?
The account used to summarize the owner's equity in a business.
What is Capital or Common Stock?
These two accounts are affected when an owner invests $4000 in a business.
What are Cash and Common Stock?
These two accounts are affected when an owner pays $200 for Rent.
What are Cash and Owner's Equity (Capital)
The principles which Accounting practices are based upon is called this.
What is GAAP?
Anything of value owned by a business.
What is an Asset?
A business owned by one person
What is a Proprietorship or Sole Proprietorship?
These two accounts are affected when a business pays $200 cash for supplies.
What are Cash and Supplies?
These two accounts are affected when a business pays $230 for a 6 month insurance policy.
What are Cash and Prepaid Insurance.
The Revenue amount listed at 4,200 for a company that noted they listed in millions would be read like this...
What is 4 billion 200 million (4,200,000,000)
anything a business OWES.
What is a Liability?
An increase in owner's equity resulting from the operation of a business.
What is Revenue?
These two accounts are affected when a business pays $30 Cash for a telephone bill.
What are Cash and Owner's Equity (Utilities Expense).
These two accounts are affected when a business purchases supplies from another company on account.
What are Supplies and Accounts Payable.
This is when a business using accrual basis accounting would record its revenue.
What happens when services are performed even if cash may be transferred at a different date?
Financial rights to a business.
What are equities.
The Accounting Concept that requires data to be complete, neutral and free from error.
What is the Faithful Representation principle?
These two accounts are affected when a business sells $300 of Inventory that cost $200 to a customer on Account.
What are Accounts Receivable and Sales Revenue, and COGS and Inventory?
These two accounts are affected when a business has a $400 sale that is made on account.
What are Owner's Equity (Revenue) and Accounts Receivable?
The debt ratio of a company with $430,000 in assets, $132,000 in Liabilities and $298,000 in Equity.
What is 30.7%?
Assets taken out of a business for personal use.
What are Withdrawals or Dividends
Keeping personal and business records separate is an application of this accounting concept...
What is the Entity concept?
These two accounts are affected when the owner collects $300 for a treadmill that he sold from his home gym.
There are NO ACCOUNTS affected.
These two accounts are affected when a business collects $400 from a customer who bought something on account.
What are Cash and Accounts receivable?
This is the organization in charge of setting the principles that guide Accounting.
What is FASB (Financial Accounting Standards Board)