Accounting Glossary III

airbud123's version from 2015-09-20 17:20

Section 1

Question Answer
salesa temporary owner's equity account used to record the earning of revenue
sales discounta temporary owner's equity contra account used to record discounts given to customers as an incentive for prompt payment
sales invoicea source document prepared by the seller that lists the items shipped, their cost and the method of shipment (from the seller's viewpoint)
sales journala book of original entry used for the recording of sales of merchandise on credit only
sales returns and allowancesa temporary owner's equity contra account used to record credit given to a customer for shortages damaged goods

Section 2

Question Answer
salvage valuethe estimated value of a fixed asset at the end of its useful life
source document/business paperthe first record of a business transaction (examples include check stubs, receipts, sales invoices, cash register tapes, etc)
special journala special journal designed to accumulate data about only one kind of business transaction
statement of accounta report sent to each other customer, usually at the end of the month, which indicates the status of their account
statement of financial condition/statement of financial positionbalance sheet

Section 3

Question Answer
statement of operationincome statement
statement of owner's equity/statement of net wortha formal financial statement which summarizes all of the changes in owner's equity during a specified period of time (C-W+R-E)
straight line depreciationa method in which the depreciable cost basis )original cost basis less salvage value) of asset is apportioned equally over its estimated useful life expressed in terms of months or years
stop payment orderan order by a depositor requesting a bank not to pay on a check previously issued
summarizingbringing accounting data together in a way that will further enhance its usefulness, usually by means of reports and statements

Section 4

Question Answer
suppliesa type of asset that will be consumed as it used (examples supplies and office supplies)
S.U.T.AState Unemployment Tax Act
T accounta skeleton form of an account used for instructional purposes
take home pay/net paythe amount of pay after deductions (income taxes, FICA taxes, etc) have been subtracted
tangible assetsthose assets that can be appraised by value or seen or touched

Section 5

Question Answer
temporary owner's equity accountsaccounts utilized to accumulate income, expenses and owner's withdrawls for one accounting period only
time/term of notethe period of time from the date of the note to the maturity date
transaction analysisthe effect of transactions on the accounting elements
transactionany activity of a business enterprise that involves the exchange of values
transposition erroran amount written with the digits in incorrect order

Section 6

Question Answer
trail balancea work paper proving the equality of the debit and credit balances in the ledger
uncollectible accounts expensebad debts expense
UCFuncollectible funds
undepreciated costbook value
useful lifethe estimated life of a fixed asset

Section 7

Question Answer
W-2 formwage and tax statement; a report furnished by the employer for each employee indicating gross earnings and deductions for income and FICA taxes
W-4 formEmployees' Withholding Allowance Certificate
wagea form of compensation usually for skilled and unskilled labor, expressed in terms of hours, weeks or pieces completed
worksheetan expanded trail balance utilizing for computing, classifying, and sorting account balances before preparing the formal financial statements

Section 8

Question Answer
basic accounting theory is based ondouble entry
the difference between the two sides of an accountaccount balance
debts that are not due and payable within a yearfixed liabilities
the difference between net sales and cost of goods soldgross margin
the process of recording information in the ledgerposting

Section 9

Question Answer
the primary purpose of a businessprofit
another name for Profit and Loss Statement isincome statement
the cost of operating a businessoverhead
credit side of the T-accountright side
accounting equationAssets=Liabilities+Owners Equity 

Section 10

Question Answer
Expanded Accounting EquationAssets=Liabilities +Capital -Withdrawals +Revenue -Expenses (A=L+C-W+R-E) (+-, -+, -+, +-, -+, +-)
Flow of Financial StatementsBalance Sheet (A=L+C-W) Statement of Owners Equity (C-W+R-E) Income Statement (R-E) equal net Income or Net Loss
Closing Formula(C-W+R-E) total R-total E = (+ or -) C +/- = C-W Ending Capital (will be beginning capital next month.