Debits and Credits
Liabilities and Revenue have this normal balance.
What is a credit?
Accounting basis in which companies record transactions that change a company's financial statements in the periods in which the events occur.
What is accrual-based accounting?
The authoritative accounting standards a business must follow are known as
What is GAAP?
A 12-month consecutive year that does not have to begin in January.
What is a fiscal year?
Discounts from the list prices in published catalogs or special discounts offered to certain classes of buyers.
What are trade discounts?
Contra revenue accounts hold this type of balance.
What is debit?
Entries made at the end of an accounting period to ensure that companies follow the revenue recognition and matching principles.
What are Adjusting entries.
A ledger account that shows transaction and payment history for each customer to whom the business has extended credit.
What is an accounts receivable subsidiary ledger?
A method of calculating depreciation in which the depreciable value is not taken into consideration.
What is double-declining balance depreciation?
2/10, n30 is called this type of discount
What is a cash discount?
A contra-liability account such as Discount on Notes Payable will likely have this balance.
What is debit?
The word that indicates that a intangible asset is used up.
What is amortization?
The method of inventory costing based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred.
What is FIFO?
The three activities that are categorized in a cash flow statement.
What are operating, financing and investing?
This contra cost account would be credited to show discount to the amount of a purchase.
What is a Purchase Discount?
Income Summary has this normal balance.
What is neither debit or credit?
XYZ, Corp. replaced a motor in a machine which extended the life of an asset. The accountant would debit this account.
What is Accumulated Depreciation?
The two most common accounts receivable accounts are these.
What is accounts receivable and notes receivable?
The freight term in which the buyer pays the transportation costs from the shipping point to the final destination.
What is FOB shipping point?
What is October 13?
Normal balance in an Unearned Revenue account is this.
What is credit? (It is considered a liability account)
Name the contra account that is used when the Allowance Method is used to write off bad debt.
What is Allowance for Doubtful Accounts?
This asset has an indefinite life and is the extra cost a business pays for another business as a recognition for being profitable. (Hint: it begins with a G)
What is goodwill?
Sales - COGS
What is Gross Profit?
When a bank deducts interest from a loan in advance, it is referred to as this.
What is discounting?