Accounting 1: Chapter 4

Card Set Information

Accounting 1: Chapter 4
2010-09-23 10:15:09
Accounting Chapter

Accounting 1: Chapter 4
Show Answers:

  1. Classified Balance Sheet
    a balance sheet that contains a number of standard classifications or sections
  2. Closing Entries
    entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent owner's equity account, Owner's Capital
  3. Correcting Entries
    entries to correct errors made in recording transactions
  4. Current Assets
    assets that a company expects to convert to cash or use up within one year
  5. Current Liabilities
    obligations that a company expects to pay from existing current assets within the coming year
  6. Income Summary
    a temporary account used in closing revenue and expense accounts
  7. Intangible Assets
    noncurrent assets that do not have physical substance
  8. Liquidity
    the ability of a company to pay obligations expected to be due within the next year
  9. Long-Term Investments
    Generally, investments in stocks and bonds of other companies that companies normally hold for many years. Also includes long-term assets, such as land and buildings, not currently being used in operations.
  10. Long-Term Liabilities
    obligations that a company expects to pay after one year
  11. Operating Cycle
    the average time that it takes to go from cash to cash in producing revenues
  12. Permanent (real) Accounts
    Accounts that relate to one or more accounting periods. Consist of all balance sheet accounts. Balance are carried forward to next accounting period
  13. Post-Closing Trial Balance
    a list of permanent accounts and their balances after a company has journalized and posted closing entries
  14. Property, Plant, and Equipment
    assets with relatively long useful lives, currently being used in operations
  15. Reversing Entry
    an entry, made at the beginning of the next accounting period, that is the exact opposite of the adjusting entry made in the previous period
  16. Stockholders' Equity
    The ownership claim of shareholders on total assets. It is to a corporation what owner's equity is to a proprietorship
  17. Temporary (nominal) Accounts
    Accounts that relate only to a given accounting period. Consist of all income statement accounts and owner's drawing account. All temporary acounts are closed at end of accounting period
  18. Worksheet
    a multiple-column form that may be used in making adjusting entries and in preparing financial statements