FPC Flash Cards Fall 2024 Chapter 9 (USG) Questions & Answers
What is equity?
Equity represents an owner's investment in the company, consisting of contributed capital and retained earnings.
What is double-entry accounting?
The process in a journal entry that records equal debits and cred...
FPC Flash Cards Fall 2024 Chapter 9
(USG) Questions & Answers
What is equity? - answer Equity represents an owner's investment in the company,
consisting of contributed capital and retained earnings.
What is double-entry accounting? - answer The process in a journal entry that
records equal debits and credits for EVERY financial transaction.
- answer
What is the General Ledger? - answer A record of business transactions by account;
journal entries are posted to the GL. The financial statements are prepared FROM the
GL.
What are internal controls? - answer They are procedures designed to safeguard a
company's assets and ensure the financial statements are not materially misstated.
-include: edits, balancing, and reconciling.
What is a journal entry? - answer The record of the daily transactions of a business;
every journal entry records EQUAL debits and credits.
What is an expense? - answer The cost of goods and services consumed by the
organization during the account period to produce the organization's products or
services.
What is the chart of accounts? - answer A list of accounts by name and/or
identification (account) number
What is a balance sheet? - answer The record of the organization's assets, liabilities,
and equity at a point in time.
=Assets = Liabilities + Equity
What is the accounting flow? - answer Starts with the transaction which is posted to
the journal. The data from the journal is then posted in the ledger. Finally, the data in
the ledger is used to create the financial statements.
What is a liability? - answer Debts that the organization has not yet paid; liabilities
represent claims against the organization's assets.
-current or long-term assets
, What is revenue? - answer The amount received for the sale of the organization's
products or services. Revenue can be recognized by the receipt of cash or a promise to
pay in the future.
What is the income statement? - answer The record of the organization's revenue
and expenses during an accounting period. The income statement shows an
organization's net income or net loss.
What is an asset? - answer An asset is anything of value tat provides an economic
benefit or value to an organization over a period of time.
-may be current, property, or intangible.
What does an accrual record? - answer An accrual records expenses in the
accounting period the expenses are incurred, NOT paid. Accruals also record revenue
in the accounting period the revenue is earned, NOT when cash is received.
What is an accounting period? - answer The period of time used to develop an
income statement; the accounting period may be a month, quarter, a half-year, fiscal-
year, or calendar year.
The payment of a liability will do what?
-decrease assets and increase liabilities
-increase assets and decrease liabilities
-decrease both assets and liabilities
-increase both assets and liabilities - answer Decrease both assets and liabilities.
Which of the following transactions is posted as a debit?
-a decrease in a liability account
-a decrease in an asset account
-a decrease in an expense account
-an increase in a liability account - answer A decrease in a liability account; debits
increase assets and decrease liabilities.
(T/F) A balance sheet is a financial statement that shows the financial position of a
business on a particular date. - answer TRUE
Checking the direct deposit file for multiple deposits to the same account can help guard
against ______?
-unauthorized access to the payroll system
-processing errors
-phantom employees - answer Phantom Employees, who exist only on payday.
A company issued a $5000 check for the purchase of new calculators. This transaction
will be posted in the cash account as ? - answer A credit
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