Compend - Accounting

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  1. Basic accounting theory is based on
    Double entry
  2. Group of accounts you debit when increased
    Assests and Expenses
  3. Group of accounts you credit to increase are
    Liabilities and capital
  4. Funeral director buys a casket coach on credit, he would
    Debit casket coach and credit accounts payable
  5. Payment of rent by cash is recorded
    Debit rent expense and credit cash
  6. Purchase of office supplies on credit is recorded by
    Debit office supplies and credit accounts payable
  7. A ledger is a book of
  8. Entry on debit side of liability account indicates account has been
  9. Entry made on debit side of proprietorship account indicates account has been
  10. Entry made on debit side of expense account indicates account has been
  11. Beginning balance in supplies account is $600. During month an additional $800 worth of supplies were purchased. At end of month, inventory of supplies found only $300 remained on hand. What would be the amount of adjusting entry for supplies account?
  12. Entry made on debit side of asset account indicates account has been
  13. Things of value owned by business are
  14. Accounting year ending on some date other than December 31st is
    Fiscal year
  15. A person to whom a debt is owed is called
  16. Plant asset was purchased by funeral home costing $8,000. It has useful life of 3 years and salvage value of $2,000. Using straight-line method of depreciation, what would be yearly amount of depreciation?
  17. Does not appear on balance sheet
  18. Liabilities are all things funeral director
  19. Profit and Loss Statement can be prepared
    Any time
  20. Entry on credit side of revenue account indicates account has been
  21. When cash is spent in acquisition of an asset the net worth of a business is
    Not affected
  22. Process of recording information in ledger is
  23. Accounts Receivable is
    Assest account
  24. Another term for Profit and Loss Statement
    Income Statement
  25. Amount of revenue from sale of funeral services would be shown on
    Profit and Loss Statement
  26. Right side of standard account is
    Credit side
  27. Totaling of column in journal or ledger account
  28. Advertising expense would be reflected on
    Income Statement
  29. Accounts payable account would be shown on
    Balance Sheet
  30. Group of accounts constitutes
  31. If total of operating expenses section of income statement is smaller than total of income section, the difference is
    Net profit
  32. Expense means
    Decrease in owners equity
  33. Account used to assist accountant in adjusting entry involving depreciation
    Accumulated depreciation
  34. Difference between the two sides of account is
    Account balance
  35. Title of account which would normally have credit balance
    Accounts payable
  36. Increase in proprietorship as result of business transaction
  37. List of accounts that shows the arrangement of accounts in ledger
    Chart of Accounts
  38. Double entry bookkeeping means entry is made
    As debit and credit
  39. Proprietorship of a business may be increased by
    Net income and investment of assests in business by owner
  40. Proprietorship of business may be decreased by
    Expenses and withdrawals of assets from business by owner
  41. To establish a petty cash fund
    Debit petty cash and credit cash
  42. Abbreviation for "debit"
  43. Abbreviation for "credit"
  44. Person who signs check or draft ordering payment to be made
  45. Person or concern, usually bank, that has been ordered to make payment on check or draft
  46. Person or company who will receive payment on promissory note, check, draft or money order
  47. F.I.C.A. refers to
    Social security
  48. Property of relatively permanent nature used in operation of business and not intended for resale
    Fixed asset
  49. Debts that are not due and payable within year
    Fixed liabilities
  50. Difference between cost of goods sold and their selling price
    Gross profit
  51. Excess of current assets over current liabilities
    Working capital
  52. Written promise of customer to pay business a sum of money at future date
    Note receivable
  53. Does not qualify as current asset
  54. Synonym for fair wear and tear of durable asset
  55. Language of business employed to communicate financial information based upon recording, classification, summarization, and interpretation of financial data
  56. Assets = Liabilities + Owner's Equity
    Accounting equation
  57. Increase in net worth due to excess of income over costs and expenses
  58. Money paid for use of money
  59. Difference between net sales and cost of goods sold
    Gross margin
  60. Goods purchased for resale at profit
  61. Disbursement
  62. Closing entry to close the revenue account
    Debit revenue, credit expense and revenue summary
  63. Income received but not yet earned
    Deferred income
  64. Paper showing quantity, description, prices of items, total amount of purchase, and terms of payment
  65. One who has made sale
  66. Estimate of revenue and probable expense for given period of time
  67. Person or business concern to whom shipment is made
  68. Distribution of profits of corporation to its stockholders as declared by board of director
  69. Person who orders bank to make payment of financial instrument is properly termed
  70. Sole owner of business
  71. Fund of currency and coin established for payment of small amounts of money
    Petty cash
  72. Difference between total sales and sales returns and allowances
    Net sales
  73. Amount added to cost of article to determine selling price of that article
  74. Total, written in small pencil figures, under last entry in column
  75. Double line under last entry on T-account means
    Entry is complete
  76. Increases in owner's equity resulting from business operations
  77. Portion of plant assets original cost that cannot be depreciated
    Scrap value
  78. Decrease in net worth due to excess of costs and expenses over income
  79. Merchandise that business keeps on hand for sale
  80. Difference between total assets and total liabilities
    • Owner's equity
    • Net worth
    • Capital
  81. Holder or person owning stock in corporation
  82. At the end of month, funeral home's assets totaled $50,000; liabilities totaled $20,000; revenue for month totaled $6,000; and total expenses amounted to $4,000. What is owner's equity and net income
    • Owner's equity = $30,000
    • Net income = $2,000
  83. Basic accounting theory is based on
    Double entry
  84. Acronym REID is used when
    Closing temporary accounts
  85. Period of time required to purchase goods and services and turn them back into cash
    Normal operating cycle
  86. Ledger is book of
  87. Entry on debit side of owners equity indicates the account has been
  88. Entry on credit side of expense account indicates account has been
  89. Book of original entry is in
    Chronological order
  90. Debts one owes
  91. Things one owns
  92. Sales minus cost of goods sold equals
    Gross profit
  93. Amount of depreciation taken during current fiscal year is properly termed
    Depreciation expanse
  94. Decrease in value of fixed asset
  95. Process of recording information in ledger
  96. Primary purpose of business
  97. Only time debit side of revenue account is used is when you make
    Closing entries
  98. When cash is spent in acquisition of asset the impact on accounting equation is
    Owner's equity is debited
  99. Entry on credit side of liability account indicates the account has been
  100. Accounts payable
    Liability account
  101. Goodwill is classified as
    Intangible asset
  102. Another name for Profit and Loss Statement
    Income Statement
  103. Amount of income from sale of funeral services would be shown on ____ formal financial statement
    Profit and Loss Statement
  104. Left side of standard account
    Debit side
  105. Income earned but not received
    Accrued income
  106. Totaling of cloumn of journal or ledger
  107. Cost of operating business
  108. Working capital is measure of
  109. Debit side of T-account
    Left side
  110. Book in which daily transactions of business are first written
  111. Credit side of T-account
    Right side
  112. Decrease in owners equity resulting from business transaction
  113. Increase to which of accounts will increase owner's equity
    Client fees
  114. Term used synonymously with operating expenses
  115. Accounts receivable are examples of
  116. Checks returned to depositor that have been paid by bank
    Canceled checks
  117. Check that has been issued but not presented for payment to bank
    Outstanding check
  118. Accounts receivable which are uncollectable
    Bad debts
  119. Ledger must contain
    All accounts
  120. Loan from bank secured by property
    Mortgage payable
  121. Salary expense is considered
    Operating expense
  122. Posting
    Transfer of figures from journal to ledger
  123. When delivery revenue is earned on account, which accounts increase and decrease
    Accounts Receivable increases; Revenues increases
  124. Special fund for use in disbursing small sums of money
    Petty cash fund
  125. Journal designed for recording particular type of transaction
    Special journal
  126. If funeral home sells funeral service on 30 day account, the entry to record transaction
    Debit accounts receivable, credit sales
  127. If funeral director receives payment from client who had purchased service on 30 day account, he would make what entries in his journal
    Debit cash, credit accounts receivable
  128. If funeral director purchases caskets from casket manufacturer on 30 day account, he would record transaction how
    Debit purchases, credit accounts payable
  129. Funeral car is purchased by funeral home from $30,000. The vehicle will be used for five years then replaced. If estimated salvage value will be $5,000, what will be amount of yearly depreciation using straightline method of depreciation for computation?

    (30,000 - 5,000 = 25,000 divided by 5 years)
  130. David O'Dell is paid salary of $1,850 per month; also time and 1/2 for all hrs worked in excess of 40 hrs per week. Mr. O'Dell worked 62 hrs last week, his gross earnings for period are
  131. John Smith paid $5.00 per hr, also paid time and 1/2 for hrs worked past 40 hrs week. Worked total 60 hrs. If FICA tax is 6%, and withholding tax is 10%, what is take-home pay for week?
  132. Liability accounts are identified by account title followed by word
  133. Expenses are listed on which reports
    • Profit and Loss Statement
    • Income Statement
  134. Report that shows financial condition of business at point in time
    • Statement of Financial Condition
    • Balance Sheet
  135. Accounting equation may be stated as
    • Assets = Liabilities + Owner's equity
    • Assets - Libilities = Owner's equity
  136. When you recognize revenue when it is earned, and expenses when they are incurred you are operating under the
    Accrual basis of accounting
  137. The account that provides a current or future benefit to the business is properly termed
    An asset account
  138. Methods of depreciation that allow the business to recover the cost early in life of the asset include
    • Double declining balance
    • Sum of years digits
  139. General journal
    Used for all types of business transactions
  140. Purchases journal
    Used to record the buying of merchandise on credit
  141. Cash recipts journals
    Used to record the recipt of cash
  142. Sales journal
    Used for recording sale of merchandis on credit
  143. Cash payments journals
    Used to record the paying of cash
  144. Current asset
    Accounts receivable
  145. Current liability
    Accounts payable
  146. Fixed asset
    Funeral coach
  147. Fixed liability
    Mortgage payable
  148. Proprietorship
  149. Balance sheet
    Statement of financial condition
  150. Trial balance
    Check of equality of debits and credits
  151. Owners equity
    Difference between assets and liabilities
  152. Assets
    Things of value owned by business
  153. Liabilities
    Debts that business owes
  154. Journal
    Book of original entry
  155. Ledger
    Book of accounts
  156. Posting
    Recording information in ledger
  157. Income statement
    Statement of income, expenses, and net income or net loss for a period of time
  158. Balance sheet
    Statement of assets, liabilities, and owners equity at specific date
  159. Assets
    Properties of monetary value owned by business
  160. Liabilities
    Any debt that business owes
  161. Owners equity
    An owners financial interest in a business
  162. Accounts payable
    Unwritten promises of a business to pay creditors
  163. Accounts receivable
    Unwritten promises by customers to the business pat at a later date
  164. Sales
    Ordinarily refers only to merchandise sold
  165. Ledger
    A book of accounts
  166. Journal
    A book of original entry in which business transactions are recorded in chronological order
  167. Purchases
    The buying of merchandise
  168. Principal
    The face value of a note on which interest is computed
  169. Debit
    Left side of standard account
  170. Credit
    Right side of standard account
  171. Current ratio
    Current assets divided by current liabilities
  172. Notes payable
    Written promise of business to pay creditor certain amount in future
  173. Notes receivable
    Written promise of customer to pay business sum of money at future date
  174. Cost
    Amount paid by business for merchandise
  175. Supplies
    Type of asset that will be consumed as used
  176. Bad debts
    Uncollectable accounts receivable
  177. Cash receipts
    Money and money substitutes received
  178. Current liabilities
    Debts that must be paid within a year
  179. Maker
    Individual who makes promise to pay on promissory note
  180. Creditor
    Business of individual to whom debt is owed
  181. Corporation
    Business, owned by stockholders, which chartered under state law to conduct business or other activity
  182. Proprietorship
    Owners equity or owners financial interest in business
  183. Merchandising business
    Business firm that obtains income through buying and selling goods
  184. Transaction
    Financial events that affect assets, liabilities, or owners equity
  185. Trial balance
    Informal statement proving total debit balances are equal to total credit balances in ledger
  186. Balance sheet
    Statement regarding status of assets, liabilities, and owners equity as of specified date
  187. Source document
    First record of business transaction
  188. Income statement
    Formal statment which presents revenue and expenses of specified period of time
  189. Income
    Increase in owners equity resulting from business operations
  190. Drawer
    Person who signs check or draft ordering payment to be made
  191. Expense
    Decrease in owners equity due to comsumption of goods and services used in operation of business
  192. Consignor
    Person or business concern by whom shipment is made
  193. Chronological
    In order of time
  194. Cash
    Coins, currency, checks, and money oders received from others, as well as money deposited in bank
  195. Capital
    Net value of owners financial interest in business
  196. Bookkeeping
    Recording of business data in prescribed manner
  197. Current assets
    Cash or other assets that will be converted into cash or consumed within one year
  198. Closing entries
    Transferal of balances of temporary accounts to capital account
  199. Check
    Written order drawn by depositor dirtecting bank to deduct money from account and pay person or company designated
  200. Charter
    Document issued by state which permits corporation to operate
  201. Bank statement
    Itemized listing of additions to and subtractions from depositor's account
  202. Accrual accounting
    Recording in each fiscal period applicable expense, whether paid or not, and income earned, whether collected or not
  203. Certified Public Accountant
    Individual certified to practive public accounting in state
  204. Investment
    Money or other assets supplied by owner for operation of business
  205. Mortgage payable
    Written promise that pledges real property as security for payment of debt
  206. Posting reference
    Journal page numbers and ledger account numbers which, when present, confirms entry has been posted
  207. Negotible instrument
    Business paper that is claim on cash and which may be transferred legally by endorsement
  208. Net working capital
    Excess of current assets over current liabilities
  209. Accrued Income
    Income earned during accounting period but not yet received
  210. Sales Discount
    Deduction from sales invoice as incentive for customers to pay their invoices early
  211. Statement of account
    Report sent to each customer which indicates status of thier account
  212. Allowance for depreciation
    Account used to accumulate decreases in value of fixed assets
  213. Sales Returns and Allowances
    Credit given to customer for shortages or damaged goods delivered
  214. Drawing Account
    Separate owners equity account in which withdrawals of assets against profits by owner are recorded
  215. Promissory Note
    Written promise to pay money to another person or business at specified or determinable time
  216. Valuation Account
    Account used to record or determine estimated value of an asset
  217. Allowance for Doubtful Accounts
    Account in which recorded decrease in value of accounts receivable due to possible uncollectable items
  218. Purchase returns and Allowances
    Credit received for shortages or for damaged goods received
  219. Retail Sales Tax
    Imposed upon purchaser of goods and collected by seller, who remits such to state or city government
  220. Income tax
    Levied on earnings of individuals and businesses by federal, state, and local government
  221. Insurance policy
    Contract between insurance company and party insured
  222. Insurance premium
    Amount paid for insurance protection
  223. Stock certificate
    Evidence of ownership of corporation stock
  224. Current asset
    Accounts receivable
  225. Current liability
    Accounts payable
  226. Proprietorship
    Capital or Net worth
  227. Fixed liability
    Mortgage payable within 15 years
  228. Fixed asset
    Assets which will not be sold during fiscal period
  229. Balance sheet
    Financial statement reflects status of assets, liabilities, and owners equity as of given date
  230. Trial balance
    Check of equality of debits and credits
  231. Assets
    Things of value owned by business
  232. Liabilities
    One's debts
  233. Proprietorship
    Equity of owner of business
  234. Fixed liability
    Mortgage payable
  235. Debtor
    One who owes debts
  236. Current liability
    Accounts payable
  237. Creditor
    One to whom debts are owed
  238. Purchases journal
    For recording the buying of article on credit
  239. Sales journal
    For receiving cash for merchandise
  240. Cash recipts journal
    For recieving cash for merchandise
  241. Cash payments journal
    Used to rocord paying cash for an item
  242. Gengeral journal
    Used for miscellaneous entries
  243. Tangible asset
  244. Intangible asset
    Capable of being touched
  245. Cash asset
    Not physical or material
  246. Current asset
    To be used relatively soon
  247. Fixed asset
    To be used over a long period of time
  248. Check stub
    A source of information for the journal
  249. Drawer
    The one who orders the bank to pay money from his account
  250. Payee
    The one to whom the bank is ordered to pay the cash
  251. Canceled
    Check returned to depositor that has been paid by the bank
  252. Outstanding
    A check that has been issued but not yet presented for payment
  253. Fiscal period
    Period for which an analysis of operations of business is made
  254. Fiscal year
    Accounting year ending some other date than December 31st
  255. Compound entry
    Journal entry that contains two or more debits or two or more credits
  256. Withdrawals
    Assets taken out of business by owner for his personal use
  257. Terms
    Time allowed for payment of sale
  258. C.P.A.
    Certified Public Accountant
  259. C.O.D.
    Collect on delivery
  260. C.I.F.
    Cost, insurance, and freight
  261. C.B.D.
    Collect before delivery
  262. F.O.B.
    Free on Board
  263. Interest
    Money paid for the use of money
  264. Mark up
    Amount added to cost of merchandise to determine selling price
  265. Fixed asset
    Land, buildings, equipment
  266. Partnership
    Business owned by two or more individuals with profits or losses jointly shared
  267. Corporation
  268. Book value
    Special book in which payments made by check are recorded
  269. Invoice
    Paper showing quantity, description, prices or items, total amount of purchase and terms of payment
  270. Check register
    Check drawn by bank on its own funds and signed by cashier
  271. Certified check
    Check which carries guarantee of drawee that sufficient funds are available to pay the check when it is properly presented
  272. Cashier's check
    Check drawn by bank on its own funds and signed by cashier
  273. Restrictive endorsement
    Endorsement which uses phrase "for deposit only"
  274. Blank endorsement
    Consists merely of signature of endorser on back of check
  275. Endorsement in full
    Endorsement which uses phrase "pay to the order of"
  276. Deferred
    Delay until a later date
  277. Disbursement
  278. Acid test ratio
    Comparison of cash and all other current assets that are readily recognizable in cash with current liabilities
  279. Inventory turnover
    Determined by dividing cost of goods by average inventory
  280. Long-lived asset ratio
    Comparison of fixed assets with fixed liabilities
  281. Current asset ratio
    Comparison of current assets with current liabilities
  282. Total asset ratio
    Comparison of total assets with total liabilities
Card Set:
Compend - Accounting

Compend - Accounting
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