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FPC Flash Cards Fall 2019_ Chapter 9 (USG) (1).
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FPC Flash Cards Fall 2019_ Chapter 9 (USG) (1).
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FPC Flash Cards Fall 2019: Chapter 9 (USG)What is equity? - ANS-Equity represents an owner's investment in the company, consisting of
contributed capital and retained earnings.
What is double-entry accounting? - ANS-The process in a journal entry that records equal debits
and credits for EVERY financial transaction.
- ANS-
What is the General Ledger? - ANS-A record of business transactions by account; journal
entries are posted to the GL. The financial statements are prepared FROM the GL.
What are internal controls? - ANS-They are procedures designed to safeguard a company's
assets and ensure the financial statements are not materially misstated.
-include: edits, balancing, and reconciling.
What is a journal entry? - ANS-The record of the daily transactions of a business; every journal
entry records EQUAL debits and credits.
What is an expense? - ANS-The cost of goods and services consumed by the organization
during the account period to produce the organization's products or services.
What is the chart of accounts? - ANS-A list of accounts by name and/or identification (account)
number
What is a balance sheet? - ANS-The record of the organization's assets, liabilities, and equity at
a point in time.
=Assets = Liabilities + Equity
What is the accounting flow? - ANS-Starts with the transaction which is posted to the journal.
The data from the journal is then posted in the ledger. Finally, the data in the ledger is used to
create the financial statements.
What is a liability? - ANS-Debts that the organization has not yet paid; liabilities represent claims
against the organization's assets.
-current or long-term assets
What is revenue? - ANS-The amount received for the sale of the organization's products or
services. Revenue can be recognized by the receipt of cash or a promise to pay in the future.
, What is the income statement? - ANS-The record of the organization's revenue and expenses
during an accounting period. The income statement shows an organization's net income or net
loss.
What is an asset? - ANS-An asset is anything of value tat provides an economic benefit or value
to an organization over a period of time.
-may be current, property, or intangible.
What does an accrual record? - ANS-An accrual records expenses in the accounting period the
expenses are incurred, NOT paid. Accruals also record revenue in the accounting period the
revenue is earned, NOT when cash is received.
What is an accounting period? - ANS-The period of time used to develop an income statement;
the accounting period may be a month, quarter, a half-year, fiscal-year, or calendar year.
The payment of a liability will do what?
-decrease assets and increase liabilities
-increase assets and decrease liabilities
-decrease both assets and liabilities
-increase both assets and liabilities - ANS-Decrease both assets and liabilities.
Which of the following transactions is posted as a debit?
-a decrease in a liability account
-a decrease in an asset account
-a decrease in an expense account
-an increase in a liability account - ANS-A decrease in a liability account; debits increase assets
and decrease liabilities.
(T/F) A balance sheet is a financial statement that shows the financial position of a business on
a particular date. - ANS-TRUE
Checking the direct deposit file for multiple deposits to the same account can help guard against
______?
-unauthorized access to the payroll system
-processing errors
-phantom employees - ANS-Phantom Employees, who exist only on payday.
A company issued a $5000 check for the purchase of new calculators. This transaction will be
posted in the cash account as ? - ANS-A credit
Salaries earned but NOT yet paid in the current month are recorded as a? (1 debit, 1 credit) -
ANS-Debit in salary expense, Credit in salary payable liab. account
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