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Flashcards in Topic 3 Deck (24)
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1
Q

A permanent general ledger account is one that

A

carries its balance forward from one accounting period to the next

2
Q

A, L, OE, and asset CON accounts are _____ accounts

A

permanent

3
Q

A _______general ledger account is one that begins each new accounting period with a zero balance.

A

temporary

4
Q

R, E, and revenue/expense CON accounts are ______ accounts

A

temporary

5
Q

_______ accounts are the ingredients of a statement of financial position

A

permanent

6
Q

__________ general ledger accounts are the ingredients of a statement of comprehensive income

A

temporary

7
Q

The Income Summary account is itself a _______ general ledger account, and therefore it also must be closed off in order to begin the new year with a ____ balance.

A

temporary, zero

8
Q

The Income Summary account is closed off to a ______ general ledger account called ______.

A

permanent, “retained earnings” ( RE)

9
Q

The “ retained earnings” account is an ___ account and, as such, it appears in the sharholders’ equity section of a company statement of_________

A

OE, financial position

10
Q

The “negative owners’ equity” CON accounts are _____general ledger accounts and therefore also _______ at the end of each accounting period.

A

temporary, closed off

11
Q

But instead of being closed off to Income Summary, “negative owners’ equity” CON accounts are closed off directly to the ______ account.

A

RE

12
Q

we shall refer to “negative owners’ equity” CON accounts as _________accounts.

A

negative appropriation

13
Q

“negative owners’ equity” CON accountshave the effect of reducing ______

A

retained earnings

14
Q

4 most common negative appropriation general ledger accounts:

  • interim ______ paid a/c
  • final _______ declared a/c
  • transfer to [name] reserve a/c
  • transfer from [name] reserve a/c
A

dividends

15
Q

Broadly speaking, dividends can be of two types - ____ and _____

A

interim and final

16
Q

In turn, any dividend (interim or final) can be usefully regarded as progressing through three distinct stages:

  • the _______by directors that a dividend be paid;
  • the_________ (that is, formal confirmation) of the dividend;
  • the________ of the dividend.
A

recommendation
declaration
subsequent payment

17
Q

In the case where directors do not have the constitutional power to declare dividends _____ (that is, where directors must seek shareholder approval prior to paying a dividend), no accounting entries must be made until ______for payment arrives.

A

unilaterally

the actual day

18
Q

The recommendation, the declaration, and the payment of an _____dividend occur wholly within the same financial year. This stands in marked contrast to a _____ dividend.

A

interim, final

19
Q

Regardless of when declaration takes place, however, the ______payment of a final dividend will always take place in the next financial period. This is because it takes time to physically prepare and draw dividend cheques and/or transfer funds to eligible shareholders.

A

actual

20
Q

Accounting for interim dividends:

When directors recommend an _____dividend, they are assumed (in ACC80006) to also have the power to simultaneously ______and _____the dividend. This will trigger the following journal entry:

Dr Interim dividend paid
Cr Bank

The _____is to a negative appropriation account, whereas the _____is to an asset account. At year end, the following balance day ______is made to close the negative appropriation account:

Dr Retained earnings
Cr Interim dividend paid

A

interim ; declare ; pay

debit ; credit ; adjustment

21
Q

for theoretical purity and consistency, as well as for Topic 6 purposes later in the ACC80006 syllabus, you are requested to use a _________ account for all dividends, and close these accounts by way of balance day ________.

A

negative appropriation ; adjustments

22
Q

Equity, in the company form of organisation, is classified into three main parts:_____, _____, _____

A

capital, other reserves, retained earnings

23
Q

Another name “negative owners’ equity”

A

“Negative appropriation”

24
Q

The RE account is also known under a variety of different names or synonyms - ______________ just to name a few.

A
retained profits, 
profit and loss appropriation, 
income appropriation, 
unappropriated profits, 
or accumulated profits/losses