Flashcards - Mechanics of the Accounting Cycle

Flashcards - Mechanics of the Accounting Cycle
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Financial statement ratios
A financial ratio or accounting ratio is a relative magnitude of two selected numerical values taken from an enterprise's financial statements
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current ratio
The current ratio is a liquidity ratio that measures whether or not a firm has enough resources to meet its short-term obligations
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asset
In financial accounting, an asset is an economic resource
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debit
In double entry bookkeeping, debits and credits are entries made in account ledgers to record changes in value resulting from business transactions
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expense
In common usage, an expense or expenditure is an outflow of money to another person or group to pay for an item or service, or for a category of costs
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chart of accounts
A chart of accounts is a created list of the accounts used by an organization to define each class of items for which money or the equivalent is spent or received
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Double-entry accounting
Double-entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account
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accounts receivable
Accounts receivable is a legally enforceable claim for payment held by a business for goods supplied and/or services rendered that customers/clients have ordered but not paid for
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accounts receivable
Accounts receivable is a legally enforceable claim for payment held by a business for goods supplied and/or services rendered that customers/clients have ordered but not paid for
Double-entry accounting
Double-entry bookkeeping, in accounting, is a system of bookkeeping so named because every entry to an account requires a corresponding and opposite entry to a different account
chart of accounts
A chart of accounts is a created list of the accounts used by an organization to define each class of items for which money or the equivalent is spent or received
expense
In common usage, an expense or expenditure is an outflow of money to another person or group to pay for an item or service, or for a category of costs
debit
In double entry bookkeeping, debits and credits are entries made in account ledgers to record changes in value resulting from business transactions
asset
In financial accounting, an asset is an economic resource
current ratio
The current ratio is a liquidity ratio that measures whether or not a firm has enough resources to meet its short-term obligations
Financial statement ratios
A financial ratio or accounting ratio is a relative magnitude of two selected numerical values taken from an enterprise's financial statements
Liquid assets
In business, economics or investment, market liquidity is a market's ability to purchase or sell an asset without causing drastic change in the asset's price
quick ratio
In finance, the Acid-test or quick ratio or liquidity ratio measures the ability of a company to use its near cash or quick assets to extinguish or retire its current liabilities immediately
accounting equation
The basic accounting equation, also called the balance sheet equation, represents the relationship between the assets, liabilities, and owner's equity of a business
journal entry
A journal entry, in accounting, is a logging of transaction into accounting journal items
trial balance
A trial balance is a list of all the general ledger accounts contained in the ledger of a business
general ledger
A general ledger contains all the accounts for recording transactions relating to a company's assets, liabilities, owners' equity, revenue, and expenses
transaction
A transaction symbolizes a unit of work performed within a database management system against a database, and treated in a coherent and reliable way independent of other transactions
earnings per share
Earnings per share is the monetary value of earnings per outstanding share of common stock for a company

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