Card Set Information
First year accounting course.
The portion of useful life that is expiredof all capital assets.
The portion of current assets that have been used up or expired.
Revenues that has been done but not recorded and we have not recieved payment for.
Expenses that have occurred but were not recorded and that we have not paid for.
The amount of previous unearned revenues that have now been earned in this peroid.
Straight Line Depreciation Equation
Cost of Asset - Estimate Salvage Value / Estimated Useful Life
matches expenses in the same accounting peroid as the revenues they helped earn.
assumes activities can be divided into specific time peroids.
Most flexible; can be used to record any type of transaction
where transactions are recorded before they are recorded into accounts; posted from journal to ledger.
record containing all accounts used by a business.
Transferring journal entries into ledger accounts.
Error occuring from adding or deleting a zero in a value.
two digits being switched or transposed
: Balance Sheet Equation!!
reports financial position of a business at a point in time.
Assets = Liabilities + Owners Equity
Business Entity Principle
requires every business be separte from its owner.
requires financial statement info to be based on actual costs incurred in transaction.
owners claim on the assets of a business.
Going Concern Principle
requires financial statements to reflect that the business will continue operating instead of being closed or sold.
subtracts expenses from revenues.
Revenues - Expenses =NI/NL
Monetary Unit Principle
expression of trasactions in money units.
Revenue Recongition Pronciple
revune is recorded at the time it is earned reguardless of whether cash or another asset has been exchanged.
Statement of Changes in Equity
reports changes in equity over the reporting peroid.
Starting Capital + Investments +/- NI/NL-Withdrawals =Owner, Capital
linked with another account and having an opposite normal balance.
Subtraction from the other accounts balance.
Account Form Balance Sheet
Lists assets on left and liabilities on the right.
Accural Basis Accounting
financial statements that uses adjusting process to recongize revenues when earned and expenses when incurred.
Cash Basis Accounting
revenues are recongized when cash is recieved, and expenses are recongized when cash is paid.
Interim financial reports
financial reports covering less than one year.