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General Acc Terms
Balance Sheet
Income Statement
Formatting
What have we done
100
Accounts Receivable, Cash, Equipment, and Truck
What are Assets
100
This GAAP states that: Business transactions must be recorded at the value they were acquired for. This value must be supported by supporting documents
What is the Cost Principle
100
The accounting period must consistently cover the same period of time. We must set that period.
What is the Time-Period Principle
100
The general layout of a balance sheet
What is assets on the left, liabilities & owner's equity on the right
100
DR Advertising Expense CR A/P
What is paid for advertising on credit
200
Assets - Liabilities or the net worth of the company
What is Owner's Equity
200
This GAAP states that transactions that involve the owner's personal finances must be separated from the business's books.
What is the Business Entity Principle
200
Revenue earned during the period must correspond with the expenses earned during the same period.
What is the matching principle
200
The signal that a number is a final total
What is a double underline
200
DR Cash CR Sales
What is sold something for cash
300
The speed at which an asset can be turned into cash.
What is liquidity
300
The concept that states: There must be at least two entries for every transaction, a debit & a credit, and they must balance.
What is Double-Entry Accounting
300
Revenue and expenses are recorded when the substance of the transaction occurs. Ie. when the revenue is earned or when the expense is used.
What is accrual accounting
300
The order in which we write the accounts on the trial balance
What is balance sheet first, then income statement (in the same order)
300
DR A/P CR Computer
What is bought a computer (asset) on credit
400
The side of the account that revenue is recorded
What is Credit
400
Dr Cash 50000 CR Capital 50000 (what is the substance of the transaction)
What is Invested in the business OR opened a new bank account
400
We must record revenue when we have earned it. Whether that is that the customer has received the goods or we have performed the service.
What is the Revenue Recognition Principle
400
The words that come before the date on an income statement
What is "For the period ended..."
400
DR A/R CR Membership fees CR Towel Rental CR Parking Fees CR Initialization Fee
What is signed up a new member (probably to a gym) - earned revenue on credit
500
Revenue - Expenses
What is Net Income or Net Loss
500
A claim that someone else has on the assets of the business.
What is a Liability
500
The balance sheet accounts most associated with revenue (but that don't have anything to do with whether we have earned the funds or not)
What are Accounts Receivable and Cash
500
The space on the balance sheet that the net income/loss figure is placed to ensure that the balance sheet balances
What is below the capital account in owner's equity
500
DR Salaries Expense CR Cash
What is paid salaries