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Accounts
entries and events
accruals, entries, and methods
Sales
Income statement
100
A transaction or change recognized on the financial statements of an accounting entity. Accounting events can be either external or internal. An external transaction would occur with an outside party, such as the purchase or sales of a good. An internal transaction would involve changes in the accounting entity's records, such as adjusting an account on the financial statements.
What is Accounting Event?
100
journal entries made at the end of an accounting cycle to update certain revenue and expense accounts and to make sure you comply with the matching principle. The matching principle states that expenses have to be matched to the accounting period in which the revenue paying for them is earned.
What is adjusting entries?
100
of something is, in finance, the adding together of interest or different investments over a period of time. It holds specific meanings in accounting, where it can refer to accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting.
What is accruals?
100
principle states that revenue should be recognized and recorded when it is realized or realizable and when it is earned. In other words, companies shouldn't wait until it is actually collected to record it in their books. It should be recorded when the business has earned the revenue. This is a key concept in the accrual basis of accounting because revenue can be recorded without actually being received.
What is revenue?
100
are the direct costs attributable to the production of the goods sold by a company.
What is costs of goods sold?
200
is the accounting classification of an account. It is part of double-entry book-keeping technique. An account has either credit (Abbrev. CR) or debit (Abbrev. DR)
What is normal balance?
200
is a journal entry made at the end of an accounting period to transfer the temporary account balances to the permanent accounts. In other words, ____ entries zero out or close temporary accounts and move their balances to permanent accounts to be carried forward to the next period.
What is closing entries?
200
only updates the ending inventory balance in the general ledger when you conduct a physical inventory count. Since physical inventory counts are time-consuming, few companies do them more than once a quarter or year. In the meantime, the inventory account in the accounting system continues to show the cost of the inventory that was recorded as of the last physical inventory count.
What is journal entries for a periodic inventory system?
200
defined as sales in which the buyer's payment obligation to the seller is settled on delivery, for example by payment in cash or by debit or credit card.
What is cash sale?
200
is a company's total earnings (or profit).
What is net income?
300
represents the owner's investment in the business minus the owner's draws or withdrawals from the business plus the net income (or minus the net loss) since the business began. Mathematically, is the amount of assets minus the amount of liabilities.
What is owner's equity?
300
is a record or audit trail about a change to a revenue schedule.
What is a revenue event?
300
has the advantages of both providing up-to-date inventory balance information and requiring a reduced level of physical inventory counts. However, the calculated inventory levels derived by a perpetual inventory system may gradually diverge from actual inventory levels, due to unrecorded transactions or theft, so you should periodically compare book balances to actual on-hand quantities, and adjust the book balances as necessary.
What is journal entries for a perpetual inventory system?
300
First-in, first-out meaning that the oldest inventory items are recorded as sold first but do not necessarily mean that the exact oldest physical object has been tracked and sold.
What is FIFO?
300
it means two things: The amount is not the correct amount, and. The amount is less than the true amount. In other words, the amount is too small.
What is understated?
400
also called a real account, is a balance sheet account that is used to record activities that relate to future periods. The reason they are called _____ account is because they are never closed at the end of an accounting period.
What is permanent account?
400
an event in which an asset is used up or a liability is incurred.
What is an expense event?
400
opposed to the net method, records an invoice at full price without regard to any cash discounts offered. In other words, the gross method assumes that the customer will not take advantage of the cash or early payment discount. It records the invoice at the gross price and adjusts for the discount later if the discount was taken.
What is Gross Price Method?
400
Last-in, first-out which is a cost flow assumption that can be used by U.S. companies in moving the costs of products from inventory to the cost of goods sold.
What is LIFO?
400
Because of double-entry accounting or bookkeeping, another general ledger account will also have a reporting error.
What is overstated?
500
is a general ledger account that begins each accounting year with a zero balance. At the end of the accounting year any balance in the account will be transferred to another account. This is referred to as closing the account.
What is temporary accounts?
500
another name for sales
What is revenue?
500
a way to record purchases of inventory with a cash discount. The net method assumes the retailer always takes advantage of the discounted cash price and records the purchased inventory at the discounted price.
What is Net Price Method?
500
or stock that refers to the goods and materials that a business holds for the ultimate purpose of resale.
What is inventory?
500
the actual cost to replace an item or structure at its pre-loss condition. This may not be the "market value" of the item, and is typically distinguished from the "actual cash value" payment which includes a deduction for depreciation.
What is replacement cost?