NBE Final Review

An expense incurred in operating a business during an accounting period, but not yet paid.

Language of business that communicates financial information based upon analyzing, recording, classification, etc.

Debts of a business that are generally paid within one year.

Accounting practice in which revenue is not recognized until received and expenses are not recognized until paid.

The difference between current assets and current liabilities.

The amount of cash a company generates and uses during a period.

A comparison of profit and expense items in the income statement expressed as a percentage of sales income

The amount by which the total assets exceed the total liabilities of a business; owner's financial interest

A tax imposed on tangible personal property sold at retail.

A source document showing quantity, description, prices of items, total amount of purchase and the terms of payment.

The cost of a fixed asset less its accumulated depreciation.

Balance of costly goods paid for in small monthly (fractional) payments over a period of time.

A tax levied on the earnings of individuals and businesses by federal, state, and local governments.

Long-term capital that is invested in the small business; i.e. land, building, machinery.

Wage and Tax Statement; a report furnished by the employer for each employee indicating gross earnings and deductions.

The estimated determinable life of a fixed asset.

The effect of business activities on the accounting elements.

The difference between gross profit and expenses when gross profit is larger.

The left side of a standard account.

Quantitative evaluation of information contained in a company’s financial statements to determine financial strength.

Income before any deductions have been made.

The point at which total sales revenue equals total operating costs; determined by formula or chart.

Recording in each fiscal period applicable expenses, whether paid or not, and income earned, whether collected or not.

A cost which is uniform per unit, but fluctuates in direct proportion to change in the related total activity or volume.

Cash of other assets that will be converted into cash or consumed within one year.

Assets equal Liabilities plus Owner’s Equity.

What is the accounting equation?

An agreement that payment for a product or service will be made at some later date.

Gross pay less payroll deductions; an employee’s take home pay.

An unwritten promise by a customer to pay, at a later date, for goods sold or services rendered.

Liabilities that are not due and payable within one year.

Debts of a business that are generally paid within one year.

Any borrowed or loaned capital invested in the business that must be repaid to  creditors.

A firm’s profits after subtracting cost of goods sold and operating expenses, before subtracting interest, taxes, etc.

Discounts from quoted prices as an inducement for prompt payment of invoices.

The paying off of a debt in regular installments over a period of time

Formal financial statement illustrating the assets, liabilities, and owner’s equity of a business as of a specific date.

Money paid for the use of money.

Any activity of a business enterprise that involves the exchange of values.

An unwritten promise to pay creditors for property, merchandise, supplies, or equipment, purchased on credit

The loss in value of a fixed asset due to wear and tear and the passage of time

Separate owner’s equity account in which withdrawals of cash or other assets by the owner for personal use are recorded.

Accounts receivable that are uncollectable.

A book of original entry in which any business transactions is recorded in chronological order.

Current assets divided by current liabilities.

The right side of a standard account.

Formal financial statement illustrating the assets, liabilities, and owner’s equity of a business as of a specific date.

Measures the average time required to collect receivables.

Formal financial statement which presents the income, expenses, and resulting net profit or net loss for a given period.

Gross pay less payroll deductions; an employee’s take home pay.

Long-term capital that is invested in the small business; i.e. land, building, machinery.

The cost of a fixed asset less its accumulated depreciation.

Net sales minus the cost of goods sold.

Property of monetary value owned by a business.

Federal act that requires most employers and employees to pay taxes to support the federal social security programs

A tax levied in most states to raise funds to pay unemployment benefits.

Income actually earned during an accounting period but which will not be received until a future period.

Cash of other assets that will be converted into cash or consumed within one year.

Federal act imposed upon each employer for costs of the federal and state unemployment compensation programs

A decrease in assets, other than withdrawals by the owner, which result from efforts to produce revenues.

A financial report showing a firm’s sources of cash as well as its uses of cash.

The difference between gross profit and expenses when expenses are larger.

The book of accounts

A line of credit that may be used over and over again up to a certain borrowing limit.

Method to obtain cash for business operations by selling off accounts receivable to a third party.

Employees’ Withholding Allowance Certificate.

An inflow of assets as a result of selling a product or providing a service.

Liabilities that are not due and payable within one year.

A type of credit granted by retailers that is used by individuals or families for satisfaction of their own wants.

These expenses do not increase with increased business, nor do they decrease with declining business activity.

Any debts that a business owes.