Accounting Vocabulary Chps 1 3

Retained Earnings – The amount of stockholders' equity the corporation has earned through profitable operations and has not used for dividends
-Totally separate from the company's cash account
-Increased by net income, decreased by dividends/net loss
Cash Basis Accounting – Accounting in which income and expenses is recorded when cash is spent and received.
chart of accounts – the official list of account titles to be used to record the transactions of a business
s corporation – allows a company to enjoy limited liability as a corporation but tax treatment as a partnership
capital expenditures – cost of adding PPE for more THAN ONE accounting period
*long-term benefits to a company
Decreases in stockholders equity that are due to the cost of operating the business are:
A) assets
B) revenues
C) expenses
D) liabilities – C)Expenses
    Behavior based on a body of knowledge and ethical standards to serve the public is called ____________________.
Three Ownership Structures – Sole proprietorship, Partnership and Corporation.
Net Pay – take home pay after deductions
normal balance – side of an account that is increased
accurate – conforming exactly or almost exactly to fact or to a standard or performing with total accuracy
Contributed Capital – the amount of financing provided by owners of the business and earnings (contributed capital, retained earnings)
    Behаviоr bаsed оn а bоdy of knowledge and ethical standards to serve the public is called ____________________.
Time Period Assumption – Indicates that the long life of a company can be reported in shorter time periods.
GAAP – Generally Accepted Accounting Principles, are the measurement rules used to develop the information in financial statements.
Objectivity Principle – Not Biased
General Ledger – A ledger containing all the transactions in the debit and credit accounts of a business.
Transaction – An event that affects the financial position of a business and can be measured reliably in Dollar amounts

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