Accounting is Fun
An accounting system in which revenues are reported when cash is received and expenses are reported when cash is paid.
What is the cash basis of accounting?
This principle is the basis for making adjusting entries that pertain to unearned and accrued revenues.
What is the Revenue Recognition Principle?
An area of accounting that provides internal reports to assist the decision-making needs of internal users.
What is Managerial Accounting?
Long-term resources that benefit business operations, usually lack physical form and have uncertain benefits.
What are intangible assets?
This is the primary purpose of accounting.
To identify, record, and communicate business transactions.
A system of accounting in which the adjustments are needed to assign revenues to periods in which they are earned and to match expenses with revenues.
What is the accrual basis of accounting?
Profit Margin can also be called this.
What is Return on Sales?
Another name for the quick ratio.
What is the acid test ratio?
A written promise to pay a definite sum of money on a specific future date.
What is a note payable?
Requires a company to consistently use the same accounting method of inventory valuation unless a change will improve financial reporting.
What is the Consistency Concept?
For a corporation, the equity section is divided into these two main accounts.
What are Common Stock and Retained Earnings?
This is a list of all the accounts used by a company and corresponding identification number.
What is the Chart of Accounts?
A legal entity separate and distinct from its owners.
What is a corporation?
Net income divided by net sales.
What is Profit Margin?
Another name for day's stock on hand.
What is Days' Sales in Inventory?
This is what a company's internal control system does.
What is monitors and controls business activities?
The process of allocating the cost of plant assets to their expected useful lives.
What is Depreciation?
The Accounting Equation.
What is A=L+E?
The broad principle that requires expenses to be reported in the same period as the revenues that were earned as a result of those expenses.
What is the Time Period Principle?
Gross Margin divided by net sales.
What is the gross margin ratio?
The use of electronic communication transfer of cash from one party to another.
What is an EFT (Electronic Funds Transfer)?
Something the company owns.
What is an asset?
Establishing responsibilities is a main principle of this.
What is an Internal Control?
Refers to steps in preparing financial statements for users?
What is the Accounting Cycle?
Cash, not including cash equivalents, includes this.
What are coins, currency and checking accounts?