Accounting Vocab

60 fill-in-the-blank flashcards covering all key terms and concepts from the lecture notes on accounting fundamentals.

The liability created by a purchase on account is called __.

ACCOUNTS PAYABLE

An asset created by selling goods or services on credit is __.

ACCOUNTS RECEIVABLE

An accounting form used to record increases and decreases in each financial-statement item is an __.

ACCOUNT

The full process that begins with analyzing transactions and ends with the post-closing trial balance is known as the __.

ACCOUNTING CYCLE

The framework upon which accounting standards are constructed consists of __.

ACCOUNTING PRINCIPLES

It provides the framework upon which accounting standards are constructed.

ACCOUNTING ASSUMPTIONS

The relationship Assets = Liabilities + Owner’s Equity is called the __.

ACCOUNTING EQUATION

The rules that determine the accounting for individual business transactions are the __.

ACCOUNTING STANDARDS

An information system that provides reports about a business’s economic activities is __.

ACCOUNTING

A revenue earned or an expense incurred but not yet recorded is an __.

ACCRUAL

Reporting revenues and expenses in the period earned or incurred refers to the __ basis.

ACCRUAL

The contra-asset account used when recording depreciation is __.

ACCUMULATED DEPRECIATION

The trial balance prepared after posting adjusting entries is the __.

ADJUSTED TRIAL BALANCE

Journal entries made to update accounts at period end are __.

ADJUSTING ENTRIES

The analysis and updating of accounts for financial-statement preparation is the __.

ADJUSTING PROCESS

Resources owned by a business are called __.

ASSETS

The difference between the debit and credit totals in an account is the __.

BALANCE OF THE ACCOUNT

A list showing assets, liabilities, and owner’s equity on a specific date is the __.

BALANCE SHEET

The difference between a fixed asset’s cost and its accumulated depreciation is its __.

BOOK VALUE

Events that directly affect an entity’s financial condition are called __.

BUSINESS TRANSACTIONS

The amount of the owner’s equity in the business is recorded in the __.

CAPITAL ACCOUNT

Information quality that allows users to identify similarities and differences is __.

COMPARABILITY

Reporting revenues and expenses when cash is received or paid is the __.

CASH BASIS OF ACCOUNTING

Accountants who meet state requirements and pass a professional exam are __.

CERTIFIED PUBLIC ACCOUNTANTS

A systematic listing of all ledger accounts is a __.

CHART OF ACCOUNTS

Entries that transfer temporary-account balances to permanent accounts are __.

CLOSING ENTRIES

The entire procedure of transferring temporary balances is the __.

CLOSING PROCESS

An account used to offset another account is a __.

CONTRA ACCOUNT

An entry prepared to fix an error in a previously posted entry is a __.

CORRECTING JOURNAL ENTRY

The concept that assets are recorded at their initial transaction price is the __.

COST PRINCIPLE

Cash and other assets expected to be converted to cash within a year are __.

CURRENT ASSETS

Liabilities due within one year and payable from current assets are __.

CURRENT LIABILITIES

A future revenue or expense initially recorded as a liability or asset is a __.

DEFERRAL

To lose value or usefulness over time is to __.

DEPRECIATE

The systematic allocation of a fixed asset’s cost over its life is __.

DEPRECIATION

The accounting system in which every transaction affects at least one debit and one credit is the __.

DOUBLE-ENTRY ACCOUNTING SYSTEM

Assets used up or services consumed in generating revenue are __.

EXPENSES

The amount withdrawn by the owner is recorded in the __.

DRAWING ACCOUNT

Long-lived tangible resources used in operations are classified as __.

FIXED ASSETS

The record in which a transaction is first entered is the __.

JOURNAL

The act of recording a transaction in the journal is called __.

JOURNALIZING

A transaction’s record consisting of at least one debit and one credit is a __.

JOURNAL ENTRY

The debts of a business, or creditors’ claims on assets, are __.

LIABILITIES

A collection of all accounts is referred to as the __.

LEDGER

A company’s ability to convert assets to cash is its __.

LIQUIDITY

Liabilities not due for more than one year are __.

LONG-TERM LIABILITIES

Matching expenses with the related revenues is expressed by the __.

MATCHING PRINCIPLE

The side (debit or credit) where an account’s balance normally appears is its __.

NORMAL BALANCE

A customer’s written promise to pay a stated amount plus interest is a __.

NOTES RECEIVABLE

Balance-sheet accounts whose balances carry forward are called __ accounts.

PERMANENT (REAL)

Payments made for future expenses, such as insurance, create __.

PREPAID EXPENSES

Transferring debits and credits from the journal to the ledger is known as __.

POSTING

Increases in owner’s equity from providing services or selling goods are __.

REVENUES

Revenues are recorded when earned according to the __.

REVENUE RECOGNITION PRINCIPLE

Guidelines governing which accounts are debited and credited are the __.

RULES OF DEBIT AND CREDIT

Assets = Liabilities + Owner’s Equity must hold true to ensure __ of the accounting equation.

BALANCE

A firm’s overall ability to meet its long-term obligations is its __.

SOLVENCY

T-ACCOUNT

The simplest form of an account, which consists of an account title, a debit side, and a credit side.

TRIAL BALANCE

A summary listing of the titles and balances of accounts in the ledger, which is used to verify that debits equal credits.

TEMPORARY NOMINAL ACCOUNTS

Term for income statement accounts because their balances relate to only one period and are not carried forward to the next period.

UNADJUSTED TRIAL BALANCE

A trial balance prepared at the end of an accounting period before adjusting entries are made.

UNEARNED REVENUE

The liability created by receiving revenue in advance.