Accounting Exam Review - Accounting Cycle & Exam Rules

Vocabulary flashcards reviewing core concepts, journalizing rules, T-accounts, adjusting entries, financial statements order, closing entries, and exam parameters covered in the review lecture.

Proctorio

The proctoring browser system required for the multiple-choice portion of the exam, which operates without an access code password if correctly installed on the testing device.

Multiple Choice Exam Parameters

The proctored section of the exam consisting of $20$ questions with a $45\text{-minute}$ time limit, drawn from the homework and quiz question pool.

Problem Section Exam Parameters

The unproctored section of the exam with a $75\text{-minute}$ time limit covering word problems and practical accounting cycle tasks.

General Rules for Normal Entries

Standard guidelines for journalizing: receiving cash is debited, paying cash is credited, expenses are debited, revenues are credited, and dividends are debited.

Common Stock Account

An equity account that tracks the cumulative stock issued by a company to stockholders, which increases via a credit entry whenever stock is sold for cash.

Accounts Payable

A liability account used when goods or services are purchased on account without signing a promissory note, intended to be paid within a short time.

Notes Payable

A liability account used when a company acquires assets or borrows funds by signing a formal written promissory note.

Accounts Receivable

An asset account representing money owed to the company by customers who have been billed for services rendered or goods supplied on account.

Supplies Expense

An expense account debited directly when supplies are received and consumed immediately during the current period, rather than being held in an asset account.

T-Account

An accounting display tool used for individual accounts to track debits on the left side and credits on the right side to calculate ending account balances.

Posting

The process of transferring debits and credits from journal entries into their respective T-accounts or general ledger cards.

Unadjusted Trial Balance

A summary listing of all account balances taken at the end of an accounting period prior to making any adjusting entries.

Adjusting Entries

Journal entries recorded at the end of an accounting period to update asset, liability, revenue, and expense balances before financial statements are prepared.

Prepaid Rent

An asset account representing advance rent payments, which is credited and transferred to rent expense incrementally as months pass.

Accumulated Depreciation

A contra-asset account paired with plant assets (such as equipment) to accumulate the total depreciation expense recognized over the asset's life.

Book Value

The net asset value reported on the balance sheet, calculated as the original cost of a plant asset minus its accumulated depreciation balance.

Accrued Expense

An expense that has been incurred in the current accounting period but remains unpaid, recorded by debiting an expense account and crediting a payable account.

Adjusted Trial Balance

A trial balance prepared after all adjusting entries have been posted to verify that total debit balances equal total credit balances across all accounts.

Financial Statements Sequence

The strict sequential order required when generating financial reports: 1) Income Statement, 2) Statement of Stockholders' Equity / Retained Earnings, 3) Balance Sheet, and 4) Statement of Cash Flows.

Income Statement

A financial report calculated by subtracting total expenses from total revenues to determine the net income or net loss for a period.

Statement of Retained Earnings

A financial report that calculates ending retained earnings by taking the beginning retained earnings balance, adding net income, and subtracting dividends paid.

Balance Sheet

A financial statement showing a company's financial position at a specific point in time, adhering to the equation $\text{Assets} = \text{Liabilities} + \text{Stockholders' Equity}$.

Temporary Accounts

Accounts used to collect transaction details for a single period—comprising revenues, expenses, and dividends—which are zeroed out during period-end closing.

Closing Entries

Journal entries made at the end of a period to reset all temporary accounts to zero and transfer their net balances into the Retained Earnings account.

Post-Closing Trial Balance

The final trial balance prepared after closing entries are posted, verifying debit-credit equality and listing only permanent balance sheet accounts.