Term
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Definition
Analyze Transactions
Journalize
Post
Prepare Unadjusted trial balance
Adjust
Prepare adjusted trial balance
Prepare statement
Close
Prepare post-closing trial balance
Reverse (optional)
REPEAT |
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Term
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Definition
Current Assets
Long-term Investments
Plant Assets
Intangible Assets
CUrrent Liabilities
Long-term Liabilities
Equity |
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Term
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Definition
Always debit income summary
Consists of closing EXPENSE, CAPITAL, and WITHDRAWAL accounts which are not permenent accounts, revenue accounts get closed with a debit to counteract the expenses account, INCOME SUMMARY IS A CREDIT INSTEAD OF DEBIT FOR REVENUE. |
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Term
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Definition
| Assets which are mostly liquid like cash, accounts receivable, notes receivable. |
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Term
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Definition
| Short term (less than a year) liabilities. Such as accounts payable, notes payable etc |
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Term
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Definition
Current Assets
______________
Current Liabilities |
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Term
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Definition
| Is a temporary account (only used for the closing process) that contains a credit for the summ of all revenues (and gains) and a debit for the sum of all expenses (and losses.) |
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Term
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Definition
| Liabilities that in order to pay them will take more than a year such as Long-term notes payable. |
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Term
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Definition
| The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any discounts allowed. |
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Term
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Definition
| Temporary accounts in other words such as expenses, revenue, capital and withdrawals. |
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Term
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Definition
| The operation cycle is the time span from when cash is used to acquire goods and services until cash in received from the sale of goods and services. |
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Term
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Definition
| Accounts that do not go through the closing process such as cash, equipment, accounts payable, etc. |
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Term
| Post Closing Trial Balance |
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Definition
| is a list of permenent accounts and their balances from the ledger after all closing entries have been journalized and posted. |
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Term
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Definition
| Reversing entries are optional. The are recorded in response to accrued assets and accrued liabilities that were created by adjusting entries at the end of a reporting period. |
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Term
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Definition
| 2% discount if paid within 10 days, net amount needs to be paid within 30 days. |
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Term
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Definition
| Discount given to the buyer if credit terms were met in a timely manner. |
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Term
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Definition
| Principle that prescribes use of the same accounting methods over time so that financial statement are comparable across periods. |
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Term
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Definition
| The amount of time allowed before full payment is due is called the credit period. |
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Term
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Definition
| When a buyer returns or takes an allowance on merchandise, the buyer issues a debit memorandum to inform the seller of a debit made to the seller's account in the buyers records. |
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Term
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Definition
The amount of time a company has to pay a bill in order to receive a discout
2/10 n/30
The "10" represents the discount period of 10 days. |
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Term
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Definition
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Term
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Definition
| The seller has reponsibility for paying the freight charges and is also responsible for the freight until the buyer receives it at the warehouse. |
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Term
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Definition
| Buyer has responsibility of paying the freight charges and ownership of the freight (and responsibility) belongs to the buyer as soon as the shipment leaves the origin warehouse. |
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Term
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Definition
Net Sales - COGS
________________
Net Sales |
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Term
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Definition
| Net sales minus the cost of goods sold |
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Term
| Interim Financial Statements |
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Definition
| Financial statements covering periods of less than one year, usually based on one-, three-, or six month periods |
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Term
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Definition
| Goods a company owns and expects to sell in its normal operations |
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Term
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Definition
| In financial accounting the term inventory shrinkage (sometimes truncated to shrink) is the loss of products between point of manufacture or purchase from supplier and point of sale. |
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Term
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Definition
| Goods that a company owns and expects to sell to customers. |
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Term
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Definition
| Entity that earns net income by buying and selling merchandise |
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Term
| Multi-step income statement |
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Definition
| Income statement format that shows subtoals between sales and net income, categorizes expenses and often reports the details of net sales and expenses. |
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Term
| Periodic inventory system |
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Definition
| Method that records the cost of inventory purchased by does not continuously track the quantity available or sold to customers; records are updated at the end of each period to reflect the physical count and costs of goods available |
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Term
| Perpetual Inventory System |
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Definition
| Method tat maintains continuous records of the cost of inventory available and the cost of goods sold |
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Term
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Definition
| term used by a purchaser to describe a cash discount granted to the purchaser for paying within the discount period |
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Term
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Definition
| term used by a seller to describe a cash discount granted to the purchaser for paying within the discount period |
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Term
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Definition
| Expenses of promoting sales, such as displaying and advertising merchandise, making sales and delivering goods to customers. |
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Term
| Single step income statement |
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Definition
| Income statement format that includes cost of goods sold as an expense and shows only one subtotal for total expenses. |
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Term
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Definition
| Reduction from a list of catalog price that can vary for wholesalers, retailers, and consumers. |
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