Financial Statements
The financial statement that must be prepared first.
What is the Income Statement?
The Accounting Equation.
The name of the report that matches the bank balance to the GL cash balance.
Cash / Bank Reconciliation
The liability that exists when something is owed to a vendor or supplier of services.
What is Accounts Payable?
The journal entry to estimate Bad Debt.
What is debiting Bad Debt, crediting Allowance for Doubtful Accounts?
The names of the four financial statements.
What are the Income Statement, Balance Sheet, Statement of Shareholder's Equity, and Statement of Cash Flows?
The accounting principle that state that expenses should be recognized in the same period as the related revenue.
What is the Matching Principle?
The classification of assets expected to be held for at least a year or more.
What are Noncurrent Assets?
The name of the liability account that records debt from a lender.
What is Notes/Loans Payable?
The term for recording the expiration of intangible assets.
What is Amortization?
Mr. Sudduth's favorite financial statement to teach.
What is the Statement of Cash Flows?
The principle that assumes that a company will continue to operate indefinitely.
What is the Going Concern Principle?
The only asset that is non-depreciable.
What is Land?
The term for a lease that is expected to be sold to the lessee at the end of the lease.
What is a Financing Lease?
The account that is credited when a customer pays for a service in advance.
What is Unearned Revenue?
The classification for the activity of interest expense on the Statement of Cash Flows
What are Operating Activities?
The name of the account that keeps track of inventory under a periodic system.
What is Purchases?
The classification of a bond when its market interest rate exceeds its stated interest rate
What is a Discount Bond?
The term for a liability that may or may not arise based on the outcome of a future event (ex. a lawsuit)
What is a Contingent Liability?
Both Journal Entries for recording the credit sale of merchandise inventory.
What is Debiting COGS, Crediting Merchandise Inventory & Debiting Accounts Receivable, Crediting Sales Revenue?
The financial statement that contains Accumulated Other Comprehensive Income
What is the Balance Sheet?
The name of a report that contains all accounts and their balances at the fiscal year-end (assume all entries have been made to prepare financial statements).
What is the Post-Closing Trial Balance?
The current ratio represents...
What is Current Assets / Current Liabilities, or a firm's ability to pay back short-term liabilities?
The term for a liability that increases as an employee provides but will be paid at a future date.
What is an Accrued Liability?
The complete journal entry for the gain on the sale of undepreciated equipment for cash.
What is Debiting Cash, Crediting Gain on Sale of Asset, and Crediting Equipment?