| A | B |
|---|
| accounting | process of keeping finacial records |
| operating expenses | An expense on the income statement for day to day costs |
| Importance of good accounting system | It shows how the business is doing |
| managers, creditors, investors | Who uses business accounting information |
| identify trends | Why study financial reports of major businesses within an industry |
| accurate and up-to-date | Useful accounting systems must be this |
| Provide info quickly | Acoounting system requirement related to speed |
| Theft and fraud | Accounting systems should prevent this |
| example of cash method | check-writing program that immediately posts each check |
| accrual method | The method that would most likely be used by a large business with many outstanding accounts payable |
| accrual method example | Sales $150, cash $240 and credit $310 |
| Bookkeeping | Records business transactions |
| Sales Journal | Where to finf sales for a particular week |
| Record, organize, summarize | Steps in accounting process |
| assets, liabilities, net worth | Categories on a balance sheet |
| Uses of a balance sheet | Ability to pay debts because it captures a businesses financial picture |
| current asset example | Accounts receivable |
| balance sheet equation | assets-liabilities= owner's equity |
| income statement | Shows Profit and loss for the year |
| puropose of accounting | Control finances of business |
