Flashcards
Chapter 10 Vocab
Cards in this deck (28)
- 1Chart of AccountsThe Chart of Accounts (Account List) is a list of all accounts used to accumulate information about assets, liabilities, owners' equity, revenues, and expenses.
- 2TransactionsDuring the accounting period, record transactions with customers, vendors, employees, and owners.
- 3Trial BalanceA Trial Balance is also referred to as an unadjusted Trial Balance because it is prepared before adjustments. A Trial Balance lists each account and the account balance at the end of the accounting period. Prepare a Trial Balance to verify that the accounting system is in balance total debits should equal total credits.
- 4AdjustmentsAt the end of the accounting period before preparing financial statements, make any adjustments necessary to bring the accounts up to date. Adjustments are entered in the Journal using debits and credits.
- 5Adjusted Trial BalancePrepare an Adjusted Trial Balance (a Trial Balance after adjustments) to verify that the accounting system still balances after adjusting entries.
Financlal Reports. Prepare financial statements (Profit and Loss, Balance Sheet, and Statement of Cash Flows) for external users and internal users. Prepare management reports. ( Chapter 10 covers financial reports, including financial statements and management reports. - 6Business OverviewBusiness Overview reports include financial statements, such as Profit and Loss reports, Balance Sheet reports, and Statement of Cash Flows
- 7Who Owes YouWho Owes You reports are used to track amounts that customers owe your business, including Accounts Receivable Aging reports, Collections report, and Open Invoices
- 8Sales and Customers reportsSales and Customers reports provide detailed information about customers and sales transactions, including Customers List, Products and Services List, Deposit Detail, Income by Customer, Sales by Customer, and Sales by Product/Service
- 9What You OweWhat You Owe reports are used to track amounts that your business owes others, including Accounts Payable reports, Unpaid Bills report, and Vendor Balance reports
- 10Expenses and VendorsExpenses and Vendors reports provide detailed information about vendors and expenses transactions, including Check Detail report, Expenses by Vendor report, Open Purchase Order Lists, and Vendors List
- 11Sales TaxSales Tax reports include reports about Sales Tax Liabilities and Taxable Sales
- 12EmployeesEmployees reports include the Employees List and Time Activities reports
- 13For My AccountantFor My Accountant reports include the Account List (Chart of Accounts), General Ledger, Journal, and Trial Balance
- 14Financial statementsFinancial statements are standardized financial reports given to external users, such as bankers and investors. The three main financial statements are the Profit and Loss, Balance Sheet, and Statement of Cash Flows.
- 15The Profit and Loss StatementThe Profit and Loss Statement lists sales (sometimes called revenues) and expenses for a specified accounting period.
- 16Profit, or net income, can be measured two different ways1. Cash basis. A sale is recorded when cash is collected from the customer. Expenses are recorded when cash is paid.
2. Accrual basis. Sales are recorded when the good or service is provided regardless of when the cash is collected from the customer. Expenses are recorded when the cost is incurred or expires, even if the expense has not been paid. - 17QBO permitsQBO permits us to prepare the Profit and Loss Statement using either the accrual or the cash basis. QBO also permits us to prepare Profit and Loss Statements monthly, quarterly, or annually.
- 18The Balance Sheet presents a company's financial position on a specific date. The Balance Sheet can be prepared at the end of a month, quarter, or year. The Balance Sheet lists:1. Assets. What a company owns. On the Balance Sheet, assets are recorded at their historical cost, the amount we paid for the asset when we purchased it. Note that historical cost can be different from the market value of the asset, which is the amount the asset is worth now.
2. Liabilities. What a company owes. Liabilities are obligations that include amounts owed vendors (accounts payable) and bank loans (notes payable).
3. Owners' equity. The residual that is left after liabilities are satisfied. Also called net worth, owners' equity is increased. by owners contributions and net income. Owners' equity is decreased by owners' withdrawals (or dividends) and net losses. - 19The Statement of Cash Flows summarizes cash inflows and cash outflows for a business over a period of time. Cash flows are grouped into three categories:1. Cash flows from operating activitles. Cash inflows and outflows related to the company's primary business, such as cash flows from sales and operating expenses.
2. Cash flows from investing activitles. Cash inflows and outflows related to acquisition and disposal of long-term assets.
3. Cash flows from financing activitles. Cash inflows and outflows to and from investors and creditors (except for interest payments). Examples include loan principal repayments and investments by owners. - 20Management reportsManagement reports are prepared as needed to provide management with information for making operating and business decisions. Reports used by management do not have to follow a specified set of rules, such as Generally Accepted Accounting Principles (GAAP) or the Internal Revenue Code.
- 21Management reports include:1. Who Owes You reports. Examples of this category of reports include Accounts Receivable Aging and Open Invoices.
2. Sales and Customers reports. This category of reports includes Income by Customer and Sales by Product/Service reports
3. What You Owe reports. Examples of this QBO report category include Accounts Payable Aging and Unpaid Bills.
4. Expenses and Vendors reports. This report category includes Open Purchase Orders and Purchases by Product/Service.
5. For My Accountant reports. Examples of this type of report include the Trial Balance, Journal, and General Ledger reports. Although the Audit Log appears in the QBO Business Overview report category, typically, it could be considered a report used by an accountant. - 22Who Owes YouWho Owes You reports are used to track amounts that customers owe your business. Examples of this type of report include Accounts Receivable Aging report, Collection reports, and Open Invoices.
- 23Sales and CustomersSales and Customers reports provide detailed information about customers and sales transactions, including Customers List, Products and Services List, Deposit Detail, Income by Customer, Sales by Customer, and Sales by Product/Service reports
- 24What You OweWhat You Owe reports are used to track amounts that your business owes others, including Accounts Payable reports, Unpaid Bills reports, and Vendor Balance reports.
- 25Expenses and VendorsExpenses and Vendors reports provide detailed information about vendors and expenses transactions, including Check Detail report, Expenses by Vendor report, Open Purchase Order Lists, and the Vendors List.
- 26For My AccountantFor My Accountant reports include reports used by an accountant in completing various accounting tasks. These reports include the Account List (Chart of Accounts), General Ledger, Journal, and Trial Balance.
- 27TagsTags are electronic labels. Tags can be customized to fit your business needs and track how you make and spend money.
- 28What are three types of financial reports a business prepares?Financial Statements, Tax Forms and Balance Sheets