The Equity account has now been expanded and includes these three NEW accounts
What are Revenue, Expenses and Drawings?
100
This GAAP states that revenue must be recorded in the accounts (recognized) at the time the transaction is completed.
What is the Revenue Recognition Convention?
100
This accounting equation is used to find the number to represent a company's income.
What is the difference between total Revenue and total Expenses?
100
Typically, the equity has this type of account.
What is a credit account?
100
Companies prefer to make purchases in this way so that they can pay later.
What is purchases on Account?
200
Now that the Ledger has expanded, the Equity is recorded in this many accounts (name those accounts!)
What is 4! Revenue, Expenses, Drawings and Capital
200
This GAAP states that each expense item related to revenue earned must be recorded in the same time period as the revenue it helped to earn.
What is the Matching Principle?
200
If a company generates a small revenue total and a higher expense total, then the company will suffer this.
What is Net Loss?
200
An increase in the revenue account is recorded as this.
What is a credit?
200
This term is used to describe a list of the ledger accounts and their numbers arranged in ledger order.
What is a Chart of Accounts?
300
Revenue and Expenses have their own accounting sheet to compare information. The sheet is called this
What is the (Simple) Income Statement?
300
This GAAP provides that accounting will take place over specific time periods known as fiscal periods.
What is the Time Period Concept?
300
In order to find an Ending Capital Figure, a company must use this equation to lump all of the equity accounts together.
What is Beginning Capital + Net Income - Net Loss - Drawings = Ending Capital?
300
An increase in the Expense Account is recorded as this.
What is debit?
300
This term is used to describe the period of time over which earnings are measured.
What is the fiscal period?
400
This term is used to describe and increase in equity resulting from a sale of goods or services
What is Revenue?
400
If a company purchases products in January (expenses) and sells them in February, the revenue must be accounted for in the January Statement; according to this GAAP.
What is The Matching Principle?
400
When there is a decrease in the drawings account, it is recorded as this.
What is credit?
400
This term is used to describe a sale for which the money is not received at the time it is made.
What is a Sale on Account?
500
This account only contains the equity figure at the beginning of the fiscal period, plus new figures from the owner, if any.
What is the Capital Account?
500
Construction companies complete projects that last years. In order to abide this GAAP, the company will bill their clients periodically when each recognized part of the construction is complete.
What is the Revenue Recognition Convention?
500
If a company has a beginning capital of $500, a net income of $200 and an ending capital of $550, the drawings account would equate to this.
What is $550?
500
In an unusual circumstance where there is a decrease in a revenue account (due to a faulty product), the figure is recorded as this type of value.
What is a debit value?
500
Accountants will use this technique to analyze if there is an improvement in a company's growth.