FBLA Accounting 1

Return on investment

The ration of the money earned on investment relative to the amount of the investment.

Real property

Land and anything attached to the land.

Personal property

All property not classified as real property.

Assessed value

The value of an asset determined by tax authorities for the purpose of calculating taxes.

Plant asset record

An accounting form on which a business records information about each plant asset.

Gain

An increase in equity resulting from activity other than selling goods or services.

Gain on plant assets

An increase in equity that results when a plant asset is sold for more than book value.

Loss

A decrease in equity resulting from activity other than selling goods or services.

Loss on plant assets

The decrease in equity that results when a plant asset is sold for less than book value.

Accelerated depreciation

Any method of depreciation which records greater depreciation expense in the early years and less depreciation expense in the later years.

Declining-balance method of depreciation

A type of accelerated depreciation that multiplies the book value of an asset by a constant depreciation rate to determine annual depreciation.

Double-declining balance method of depreciation

A declining-balance rate that is two times the straight-line rate.

Intangible asset

An asset that does not have physical substance.

Amortization

The spreading of the cost of an intangible asset over its useful life.

real property

land and anything attached to the land

personal property

all property not classified as real property

assessed value

The value of an asset determined by tax authorities for the purpose of calculating taxes

plant asset record

An accounting form on which a business records information about each plant asset.

gain on plant assets

Revenue that results when a plant asset is sold for more than book value.

loss on plant assets

The loss that results when a plant asset is sold for less than book value.

payroll

list of a business's employees and the payment due to each employee for a specific pay period

pay period

amount of time for which an employee is paid

payroll clerk

a person who is responsible for preparing the payroll

gross earnings

total amount of money earned by an employee in a pay period

salary

fixed amount of money paid to an employee for each pay period

wage

amount of money paid to an employee at a specificed rate per hour worked

time card

record of the time an employee arrives at work each time, the time the employee leaves, and the total number of hours worked each day

electronic badge readers

computer technology where each employee's time card has a magnetic strip on which is encoded certain employee information

piece rate

amount paid for each piece produced in a factory or manufacturing plant

commission

amount paid to an employee based on a percentage of the employee's salary

overtime rate

set by the Fair Labor Standards Act, is 1 and 1/2 times the employee's regular rate

deduction

the amount that is subtracted from gross earnings

exemption

an allowance claimed by a taxperson that reduces the amount of taxes that must be paid

payroll register

form that summarizes information about an employees' earnings for each pay period

net pay

amount of money left after all deductions are subtracted from gross earnings

direct deposit

the employee's net pay is deposited in her or his personal bank account

employee's earnings record

where the individual payroll record for each employee is recorded

accumulated earnings

each employee's year to date gorss earnings

unemployment taxes

based on a percentage of their employees' gross earnings and are collected to provide funds for workers who are temporarily out of work

federal tax deposit coupon

(Form 8109) prepared and sent with the check to show the amount of taxes being sent to the federal governement

form 941

the employer's quarterly federal tax return

form w-2

summarizes an employee's earnings and tax deductions for the previous calendar year

form w-3

summarizes the information contained on the employee's form w-2

form 940

an employer's annual unemployment tax return

internal controls

those steps the business takes to protect cash and other assets

external controls

those controls provided outside the business (ex. verifying the accuracy of a signature)

checking account

a bank account that allows a bank customer to desposit cash and to write checks against the account balance

check

a written order from a depositor telling the bank to pay a stated amount of cash to the person or business named on the check

depositor

person or business that has cash on deposit in a bank

signature card

contains the signatures of the pesrons authorized to write checks on the bank account

deposit slip

a bank form on which the currency and checks to be deposited are listed (deposit ticket)

endorsement

authorized signature that is written or stamped on the back of a check

restrictive endorsement

restricts or limits how a check may be handled

drawer

the person who signs a check

drawee

bank on which the check is written

voiding a check

writing the words void in large letters across the top of a check

bank statement

itemized record of all the transactions occuring in a depositor's account over a given period, usually a month

canceled check

returned checks that are stamped and marked with the word paid and the date of the payment

reconciling the bank statement

the process of determining any differences between the balances shown on the bank statement and the checkbook balances

outstanding checks

checks that have been written but not deposited

outstanding deposits

deposits that have been made and recorded in the checkbook but do not appear on the bank statement

bank service charge

fee charged by the bank for mainting bank records and for processing bank statement items for the depositor

stop payment order

demand by the depositor that the bank not honor a certain check

NSF check

one returned by the bank because there are not sufficient funds in the drawer's checking account to cover the amount of the check

electronic funds transfer system

enables banks to transfer funds from the account of one depositor to the account of another quickly and accurately without the immediate exchange of checks

merchandising business

buys goods such as books, clothing or furniture and then sells those goods for profit

retailer

business that sells to the final user

wholesaler

business that sells to the retailer

merchandise

the goods bought for resale to customers

inventory

the items of merchandise the business has in stock

sale on account

the sale of goods that will be paid for later

charge customer

the customer to whom a slae on account is made

credit cards

entitles a charge customer to charge merchandise

sales slip

form that lists the details of a sale: the date, the name of the customer, and the description, quantity, price

sales tax

tax on the retail sale of goods and service

credit terms

set out the time allowed for payment (total amount of sale/amount of time)

special journals

multicolumn journals that have columns reserved for the recording of specific types of transactions

sales journal

special journal used to record only the sale of merchandise on account

accounts receivable subsidiary ledger

separate ledger that contains accounts for all charge customers

subsidiary ledger

ledger, or book, that is summarized in a controlling account in the general ledger

controlling account

balance must equal the total of all the account balances in the subsidiary ledger

footing

column total written in small pencil figures

Adjusting Entries

Journal entries recorded to update general ledger accounts at the end of a fiscal period.

Permanent Accounts

accounts used to accumulate information from one fiscal period to the next.

Temporary Accounts

Accounts used to accumulate information until it is transferred to the owner's capital account.

Closing Entries

Journal entries used to prepare temporary accounts for a new fiscal period.

Post-Closing Trial Balance

A trial balance prepared after the closing entries are posted

Accounting Cycle

The serious of accounting activities included in recording financial information for a fiscal period

Stakeholders

Individuals or groups who have an interest in and are affected by the actions of an organization

Component Percentage

The percentage relationship between one financial statement item and the total that includes that item.

Fiscal Period

The length of time for which a business summarizes and reports financial information.

Work Sheet

A columnar accounting form used to summarize the general ledger information needed to prepare financial statements

Trial Balance

A proof of the equality of debits and credits in a general ledger.

Adjustments

Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.

Balance Sheet

A financial statement that reports assets, liabilities, and owner's equity on a specific date.

Income Statement

A financial statement showing the revenue and expenses for a fiscal period.

Net Income

The difference between total revenue and total expenses when total revenue is greater

Net Loss

The difference between total revenue and total expenses when total expenses are greater.

Code of Conduct

A statement that guides the ethical behavior of a company and its employees.

Checking Account

A bank account from which payments can be ordered by a depositor