Accounting Chapter 10 Vocabulary

Trial Balance – Trial balance: a proof of the equality of the debits and credits in a general ledger
to grant – agree to give or allow (something requested) to.
ex. to grant a loan
expense – A decrease in owner's equity resulting from the operation of a business.
Intangible assets – Noncurrent assets that do not have physical substance.
account format – assets left side, liabilities and owner equity right side.
Main purpose of adjusting – for internal use
FOB shipping point – freight terms indicating that ownership of goods passes to the buyer when the public carrier accepts the goods from the seller
Income Statement – financial statement that reports revenue and expenses over a period of time
unit of measurement – Only transactions denominated in dollars (currency) are recorded in the accounting records
Annual report – Report prepared by corporate management that presents financial information including financial statements, a management discussion and analysis section, notes and an independent auditors report
The conjugate acid of H2O is
Lease – A written agreement which grants to the lessee the right to use q particular asset for the specified period of yime in return for periodic payment to the lessor.
Partnerships – A relationship between two or more people to carry on a business in common with a view to profit
What is Comparability? – The business needs to be able to compare the financial information of the business to identity trends and performance.
General Ledger – a ledger that contains all accounts needed to prepare financial statements
Paid wages to employess – Wages Expenses: Cash.
Expense and Assets.
Expense: Increases.
Assets: Decrease.
Increases and Decreases.
Debit and Credit.
Income Statement and Balance Sheet.
Which of the following must be added to the beginning retained earnings to compute ending retained earnings? – net income
cash -basis accounting – record revenues at the time we receive cash and expenses at the time we pay cash.
The cоnjugаte аcid оf H2O is
Loan – Something a bussines loans from a bank that has to be paid back
net loss – expenses > revenues
Going Concern Principle – Business will be in operation indefinetly
Sales returns and sales allowances increase the amount of sales. – False
Long-term investments – Generally, (1) investments in stocks and bonds of other companies that companies normally hold for many years, and (2) long-term assets, such as land and buildings, not currently being used in operations.

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