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Accounting Exam 1 (rated 100% correct).
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Accounting Exam 1 (rated 100% correct).Account Balance ANS - Difference between total debits and total credits (including the beginning
balance) for an account.
Accounting ANS - comprehensive system for collecting, analyzing, and communicating financial
information
Accounting Cycle ANS - for a given time period, the cycle of recording accounting data, adjusting the
accounts, preparing the financial statements, and closing the temporary accounts; when one accounting
cycle ends a new one begins
Accounting Event ANS - Economic occurrence that changes a company's assets, liabilities, or equity
Accounting Period ANS - Time span covered by the financial statements; normally one year, but may be
a quarter, month or some other time interval
Accrual ANS - Accounting recognition of revenue or expense in a period before cash is exchanged
Accrual Accounting ANS - Accounting system which recognizes revenues when earned and expenses
when incurred regardless of when the related cash is exchanged
Adverse Opinion ANS - Opinion issued by a certified public accountant that means one or more
departures from GAAP in a company's financial statements are so very material the auditors believe the
financial statements do not fairly represent the company's status
Adjusting Entry ANS - Entry that updates account balances prior to preparing financial statements; a
bookkeeping tool. Adjusting entries never affect the Cash account
Allocations ANS - Recognizing expenses by systematically assigning the cost of an asset to periods of
use
, American Institute of CPA's ANS - National association that serves the education and professional
interests of member of the public accounting profession; membership is voluntary
Annual Reports ANS - Document companies publish to provide information, including financial
statements, to stockholders
Asset Exchange Transaction ANS - A transaction that decreases one asset and increases another asset;
total asset remain unchanged.
Asset Source Transaction ANS - A transaction that increases both an asset and a claim on assets ; the
three types of asset source transactions are aquisitions from owners (equity), borrowing from creditors
(liabilities), or earnings from operations (revenues).
Asset Use Transaction ANS - A transaction that decreases both an asset and a claim on assets; 3 types
are distributions, liability payments, or expenses
Asset ANS - Economic resource used to produce revenue which is expected to provide future benefit to
the business
Audits ANS - the verifying of facts or procedures
Balance Sheet ANS - A financial statement that summarizes a company's assets, liabilities and
shareholders' equity at a specific point in time.
Books of original entry ANS - A journal in which a transaction is first recorded.
Book Value ANS - the asset's cost minus accumulated depreciation; carrying amount; net amount of a
plant asset
Claims ANS - Owners' and creditors' interests in a business's assets
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