CS Financial & Accounting Basics Flashcards

What is the term for money owed TO a business by its customers?

Answer: Accounts receivable

Accounts receivable represents money customers owe the business for goods or services already delivered.

Which financial document summarizes a company's assets, liabilities, and equity at a specific point in time?

Answer: Balance sheet

The balance sheet provides a snapshot of a company's financial position at a given date.

Petty cash funds are used primarily for:

Answer: Small, routine office expenses

Petty cash covers minor day-to-day expenses such as postage, office supplies, or small refreshments.

What does an invoice represent?

Answer: A bill sent to a customer requesting payment

An invoice is a document sent by a seller to a buyer listing goods or services provided and the amount due.

Which of the following is an example of a fixed expense?

Answer: Monthly rent

Fixed expenses remain constant each period regardless of business activity, such as monthly rent.

Bank reconciliation is performed to:

Answer: Match the company's records with the bank statement

Bank reconciliation ensures the company's internal cash records agree with the bank's records, identifying discrepancies.