any financial event that would impact the account balances of a company's financial statements. examples are if the company uses or receives cash, or adjusts an entry in its accounting records
What is an accounting event?
100
journal entries recorded at the end of an accounting period to alter the ending balances in various general ledger accounts.
What is an adjusting entry?
100
a record or audit trail about a change to a revenue schedule. Date, Revenue Event Type, Recognition Start and Recognition End, Revenue Item is what this event is comprised of
What is a revenue event?
100
when they are realized or realizable, and are earned (usually when goods are transferred or services rendered), no matter when cash is received.
When are revenues recognized?
100
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 an understated amount?
200
the expectation that a particular type of account will have either a debit or a credit balance based on its classification within the chart of accounts.
What is normal balance?
200
entries made at the end of an accounting period to zero out all temporary accounts and transfer their balances to permanent accounts. In other words, the temporary accounts are closed or reset at the end of the year.
What is a closing entry?
200
the events that result in money flowing out of the business. examples are salaries, wages, bills, etc.
What is an expense event?
200
an occasion when something is sold and payment is made immediately:
What is a cash sale?
200
The amount is not the correct amount, and. The amount is more than the true amount. In other words, the amount is too much.
What is an overstated amount?
300
found on the balance sheet and are categorized as asset, liability, and owner's equity accounts.
What is a permanent account?
300
under this system, an entity continually updates its inventory records to account for additions to and subtractions from inventory for such activities
What is a perpetual inventory system?
300
stands for 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. In other words, the cost associated with the inventory that was purchased first is the cost expensed first.
What is FIFO?
400
refers to items found on your income statement, such as revenues and expenses. it begins each accounting year with a zero balance.
What is a temporary account?
400
a logging of transaction into accounting journal items.
What is a journal entry?
400
records an invoice at full price without regard to any cash discounts offered. 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 the gross price method?
400
stands for last in, first out. used to place an accounting value on inventory. This method operates under the assumption that the last item of inventory purchased is the first one sold.
What is LIFO?
500
permanent account
What account is owners equity a part of?
500
adjustments for 1) revenues that have been earned but are not yet recorded in the accounts, and 2) expenses that have been incurred but are not yet recorded in the accounts.
What is an accrual?
500
a way to record purchases of inventory with a cash discount. assumes the retailer always takes advantage of the discounted cash price and records the purchased inventory at the discounted price
What is the met price method?
500
Merchandising and manufacturing companies keep an inventory of goods held for sale. Management is responsible for determining and maintaining the proper level of goods in inventory.