Accounting Terminology
Listed Below Are Eight Technical Accounting Terms Introduced

question 45

Essay

Accounting terminology
Listed below are eight technical accounting terms introduced in this chapter:
Each of the following statements may (or may not) describe one of these technical terms. In the space provided beside each statement, indicate the accounting term described, or answer "None" if the statement does not correctly describe any of the terms.
____ (a) Cash sales and collections of accounts receivable.
____ (b) The classification of cash flows which includes issuing capital stock and paying dividends.
____ (c) The financial statement which best describes the profitability of a business.
____ (d) The section of a statement of cash flows summarizing the cash effects of most transactions entering into the determination of net income.
____ (e) An expense that reduces net cash flow but does not reduce net income.
____ (f) The classification of cash flows that includes purchases and sales of plant assets.
____ (g) Transactions shown in a supplementary schedule accompanying a statement of cash flows.
$$\begin{array} { | l | l | } \hline \text { Cash received from customers } & \text { Operating activities } \\\hline \text { Financing activities } & \text { Investing activities } \\\hline \text { Cash equivalents } & \text { Statement of cash flows } \\\hline \text { Non-cash investing and } & \text { Income statement } \\\hline \text { financing activities } & \\\hline\end{array}$$

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Definitions:

Basis

The initial value of an asset for tax purposes, used to determine gain or loss on sale or disposition.

Rental Property

Real estate property that is owned by an individual or entity and rented out to tenants in exchange for monthly rental payments.

Recognized Gain

is the portion of a gain that is subject to taxation under the tax laws after the sale or exchange of an asset.

Basis

The original value or cost of an asset or investment for tax purposes, crucial for calculating gain or loss on disposition.