Chapter 10 Key Concepts

Pregunta	Respuesta
Chart of Accounts	List of all accounts used to accumulate information about assets, liabilities, owners' equity, revenues, and expenses.
Transactions	During the accounting period, record transactions with customers, vendors, employees, and owners
Trial Balance	Also an unadjusted trial balance because it is prepared before adjustments. Lists each account and the account balance at the end of the accoutning period
Adjustments	Any necessary adjustments are made at the end of the accounting period before preparing financial statements
Adjusted Trial Balance	Done to verify that the accounting system still balances.
Financial Reports	Prepares for external users. (Profit and Loss, Balance Sheet, and Statement of Cash Flows)
Profit and Loss Statement	Lists sales (revenues) and expenses for a specified accounting period. Profit or net income can be measured in two ways ( Cash basis or accrual basis )
Cash Basis	Sale is recorded when cash is collected from the customer. Expenses are recorded when cash is paid
Accrual Basis	Sales are recorded when the food 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
Cash Flows From Operating Activities	Cash inflows and outlfows related to the company's primary business, such as sales and operating expenses
Cash Flows From Investing Activities	Cash inflows and outlfows related to acquisition and disposal of long-term assets
Cash Flows From Financing Activities	Cash inflows and outflows to and from investors and creditors (except for interest payments)
Who Owes You Reports	Accounts Receivable Aging and Open Invoices (Used to track amounts that customers owe your business)
Sales and Customer Reports	Income by Customer and Sales by Product/Service ( provide detailed information about cutomers and sales transactions )
What You Owe Reports	Accounts Payable Aging and Unpaid Bills ( track amounts that your business owes others )
Expense and Vendors Reports	Open Purchase Orders and Purchases by Product/Service ( provide detailed information about vendors and expenses transactions )
For My Accountant Reports	Trial Balance, Journal, and General Ledger ( include reports used by an accountant in completing various tasks )
Tags	Electronis labels
Financial Reports a Business Prepares	1.) Financial Statements 2.) Tax Forms 3.) Management Reports
Financial Statements	Profit and Loss, Balance Sheet, and Statement of Cash Flows
Profit and Loss	Lists income and expenses, summarizing the income a company has earned and the expenses incurred to earn the income
Balance Sheet	Lists assets, liabilities, and owners' equity, summarizing what a company owns and owes on a particular date
Statement of Cash Flows	Lists cash flows from operating, investing, and financiing activities of a business

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