Reports and Financial records of the business are kept separate from the personal records

Business Entity Concept

Following the same accounting procedures in the same way in each accounting period is an application of the which concept

Consistent Reporting

A business prepares a balance sheet to report information about

the business's assets, liabilities, and owner's equity

A business that buys and resells merchandise to retail merchandising businesses is called

Wholesale Merchandising Business

Keeping the reports and financial records of a business separate from the personal records of the partners is an application of the accounting concept

Business Entity

The price a business pays for goods it purchases to sell

Cost of merchandise

Increases in an owner's capital account are shown on a T account's

credit side

A business expecting to make money and continue in business indefinitely is applying the accounting concept

Going Concern

The amount added to the cost of merchandise to establish the selling price is called

Markup

The employer social security tax rate is based on

the same rate and earnings as employee social security tax

The procedure for transferring information from a journal entry to a ledger account is

Posting

A business from which merchandise is purchased

Vendor

An agreement between a buyer and a seller about payment for merchandise is called

Terms of Sale

Tax on the sale of merchandise or services

Sales Tax

The amount of sales tax collected is a business ______________ until it is paid to the state government.

Liability

Accounting concept applied when a sales invoice is used as a source document for recording a sale on account

Objective Evidence

A ledger that is summarized in a single ledger account

Subsidiary Ledger

A subsidiary ledger containing only accounts for vendors from whom items are purchased or bought on account

Accounts payable ledger

A subsidiary ledger containing only accounts for charge customers

Accounts receivable ledger

An account in a general ledger that summarizes all accounts in a subsidiary ledger

Controlling Account

A listing of customer accounts, account balances, and total amount due from all customers is called

Schedule of accounts receivable

To prove the accuracy of posting, what three things must be done:

1. Cash is Proved 2. Subsidiary schedules are prepared to prove that the total of the balances in the subsidiary ledgers equals the balance of the controlling account in the general ledger. 3. A trial balance is prepared to prove that debits equal credits in the general ledger

The total amount earned by all employees for a pay period is called

Payroll

The total pay due for a pay period before deductions

Total Earnings

Taxes based on the payroll of a business are called

Payroll Taxes

A deduction from total earning for each person legally supported by a taxpayer including the employee

Withholding allowance

What does FICA stand for?

Federal Insurance Contributions Act

What is FICA for?

Provides for a federal system of old-age, survivors, disability, and hospital insurance.

A federal tax paid for old-age, survivors, and disability insurance is called

Social Security Tax

A federal tax paid for hospital insurance is called

Medicare Tax

A business form used to record payroll information is called a

Payroll Register

In general, when are employers required to pay state unemployment taxes

During the month following each calendar quarter

A form used to record details affecting payments made to an employee is called

An employee earnings record

A federal tax used for state and federal administrative expenses of the unemployment program is called

Federal Unemployment Tax

The accounting concept applied when adjusting entries bring general ledger account balances up to date and when the closing entries prepare temporary accounts for the next fiscal period.

Matching Expenses with Revenue

A state tax used to pay benefits to unemployed workers is called

State Unemployment Tax

An annual report provided to an employee that summarizes the total year’s earnings, and the amounts withheld from taxes for an employee

W-2 Wage and Tax Statement

The accounting concept applied when a work sheet is prepared at the end of each fiscal period because financial statements are prepared at the end of each fiscal period

Accounting Period Cycle

The amount of goods on hand for sale to customers is called

Merchandise Inventory

All the payroll information needed to prepare a payroll and tax reports are found on

the payroll register and the employee earnings record

The accounting concept applied when expenses in the fiscal period are recorded in the same period as when the expenses contributed to earning revenue to ensure accurate reporting.

Matching Expenses with Revenue

The accounting concept applied when The prepaid insurance account balance must be adjusted to bring the balance up to date.

Matching Expenses with Revenue

The total earnings subject to federal unemployment tax is referred to as

unemployment taxable earnings

Accounting concept applied when the financial statements are prepared to show a business’s financial condition, changes in the financial condition and the progress of operations

Adequate disclosure

Accounting concept applied when financial information is reported the same way from one fiscal period to the next

Consistent Reporting

The two additional financial statements that a partnership must prepare, that a sole proprietor does not

Distribution of Net Income and Statement of Owner’s Equity

The accounting concept applied when the total original price of all merchandise sold during a fiscal period is reported as the cost of merchandise sold.

Historical Cost

The revenue remaining after cost of merchandise sold has been deducted

Gross Profit on Sales

A partnership financial statement showing net income or loss distribution to partners is called

Distribution of Net Income Statement

A financial statement that summarizes the changes in owners’ equity during a fiscal period is called

Owners’ Equity Statement

What three factors can change owner’s equity:

Additional investments 2) Withdrawals 3) Net Income/Loss