GAAP Vocabulary
The term for a transaction involving credit (not paid immediately).
What is "on account"?
You pay cash for equipment. In the journal and ledger, Cash can be found on this side of the debits and credits.
What is Debits?
This is how you would find NET INCOME.
What is (GROSS PROFITS) REVENUE - EXPENSES = NET INCOME?
This is the term used when talking about what a company will be able sell an asset for when they are finished using it.
What is Salvage Value?
This is the Accounting Equation.
This is the term for a business activity that changes the accounting equation.
What is a transaction?
You make $10,000 in sales within a month, which means this part of the accounting equation has now increased by $10,000.
What is Owner's Equity?
If liabilities are greater than assets, owner’s equity is:
What is Negative?
If you buy an asset for $20,000 and Use it for 5 years before selling it for $5,000. Using the straight line depreciation method, this would be the annual depreciation rate. (Purchased 1/1)
What is $3,000?
If ASSETS increase by $10,000 and LIABILATIES do not change, then:
What is Equities Increase?
What is meant by the term “liquidity”?
What is General Journal page number?
If you make $25,000 in a month but expenses are $15,000, this would be net income.
What is $10,000?
If you buy an asset for $50,000 and Use it for 7 years before selling it for $15,000. Using the straight line depreciation method, this would be the annual depreciation for year 1. (Purchased 7/1)
What is $2,500?
Purchasing Equipment on Account affect these parts of the accounting equation.
What is assets and liabilities?
This is the normal balance side of asset accounts. (Debit/Credit)
What is Debit?
You pull from prepaid insurance to pay for a month's insurance cost. In this transaction, the Prepaid Insurance can be found on this side of debits and credits.
What is Credit?
This financial statement shows revenues and expenses.
What is an Income Statement?
If you buy an asset for $1,000 and Use it for 4 years before selling it for $600. Using the double decline depreciation method, this would be the annual depreciation rate?
What is 25%?
If Assets = $1,500 and Liabilities = $500, then Equity = this.
This is the meaning of Double Entry accounting.
What means that every transactions uses two or more accounts?
In most Chart of Accounts, Cash can be found as this number, as it is typically the first account on the chart.
What is 110?
This financial document tells how much the Owner puts in and pulls out of the business.
What is a Statement of Owner's Equity?
If you buy an asset for $10,000 and Use it for 4 years before selling it for $6,000. Using the double decline depreciation method, this would be the annual depreciation be for year 1? (Purchased 1/1)
What is $4,000?
The Accounting equation must always _________.
What is Balance?