Chapter 9 Key Terms

Pregunta	Respuesta
Accounting Cycle	The accounting cycle is a series of accounting activities that a business performs each accounting period
Chart of Accounts	The Chart of Accounts is a list of all accounts used to accumulate information about assets, liabilities, owners' equity, revenues, and expenses. Create a Chart of Accounts when the business is established and modify the Chart of Accounts as needed over time.
Transactions	During the accounting period, record transactions with customers, vendors, employees, and owners.
Trial Balance	A 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.
Adjustments	At 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.
Adjusted Trial Balance	Prepare an Adjusted Trial Balance (a Trial Balance after adjustments) to verify that the accounting system still balances. If additional account detail is required, print the general ledger (the collection of all the accounts listing the transactions that affected the accounts).
Financial Statements	Prepare financial statements for external users (Profit and Loss, Balance Sheet, and Statement of Cash Flows). Prepare income tax summary reports and management reports.
Scheduled Recurring Transactions	These recurring transaction are scheduled for QBO to automatically enter the transaction on a date we specified. Since we need to update adjusting entry amounts each year, Scheduled is typically not a good option to use for adjusting entry Recurring Transactions.
Unscheduled Recurring Transactions	Unscheduled transactions will appear in the Recurring Transaction List but QBO will not automatically enter the transaction. Instead, we must go to the Recurring Transaction List and select Use. Although we could use Unscheduled for an adjusting entry Recurring Transaction, this option will not remind us to make the adjusting entry.
Reminder Recurring Transactions	Recurring Transactions with Reminder option will alert us with a reminder when we should use a recurring transaction to enter a new transaction. Since we need to update the amounts for adjusting entries each month, quarter, or year, select Reminder for adjusting entry Recurring Transactions.
Prepaid Items	Items that are prepaid, such as prepaid insurance or prepaid rent.
Unearned Items	Items that a customer has paid us for, but we have not provided the product or service.
Accrued expenses	Expenses that are incurred but not yet paid or recorded.
Accrued revenues	Revenues that have been earned but not yet collected or recorded.
Unearned Items	consist of revenue that we have not earned. If a customer pays in advance of receiving a service, such as when a customer pays a retainer, our business has an obligation (liability) to either provide the service in the future or return the customer's money. An adjustment may be necessary to bring the revenue account and unearned revenue (liability) account up to date.
Accrued expenses	Accrued expenses are expenses that are incurred but not yet paid or recorded. Examples of accrued expenses include accrued interest expense (interest expense that has been incurred but not yet paid).
Adjusting Entry	The adjusting entry is a Journal entry recording the amount that needs to be transferred between the two accounts, an Expense account and a Liability account, to show the appropriate balance in each account.
Accrued revenues	Accrued revenues are revenues that have been earned but not yet collected or recorded. Examples of accrued revenues include interest revenue that has been earned but not yet collected or recorded.
Adjusted Trial Balance	The Adjusted Trial Balance is prepared after adjusting entries are made to view updated account balances and verify that the accounting system still balances.

Siguiente

Descripción

Resumen del Recurso

Similar

	Creado por Landon Searles hace 9 días