CPB Bookkeeper flashcards

33 cards. Read the term and the definition here. The deck at the top of this page is optional.

Accounting equation

Assets = Liabilities + Equity. Every transaction affects at least two accounts and keeps this equation in balance, forming the basis of the double-entry bookkeeping system.

Debit and credit rules

Debits increase assets and expenses and decrease liabilities, equity, and revenue. Credits do the opposite. Every journal entry must have equal total debits and credits.

Trial balance purpose

Lists every general ledger account and its ending balance to confirm total debits equal total credits before financial statements are prepared. It does not detect every type of error.

Accrual versus cash basis

Accrual records revenue when earned and expenses when incurred regardless of cash timing. Cash basis records transactions only when cash is received or paid out.

Adjusting entries

End-of-period entries that record accrued revenues and expenses, deferrals, prepaids, and depreciation so amounts land in the correct period. They never involve the cash account.

Closing entries

Entries that transfer balances of temporary accounts such as revenues, expenses, and owner withdrawals into equity, so temporary accounts begin each new period at zero.

Bank reconciliation formula

Adjusted bank balance equals statement balance plus deposits in transit minus outstanding checks, adjusted for bank errors. It must equal the adjusted book balance before reconciling is complete.

Straight-line depreciation formula

Cost minus salvage value, divided by estimated useful life in years, equals annual depreciation expense. The same amount is recorded each full year of the asset's life.

Current ratio

Current assets divided by current liabilities. It indicates whether short-term resources can cover obligations due within one year; a higher result generally signals stronger liquidity.

Chart of accounts types

Every QuickBooks account is assigned a type such as asset, liability, equity, income, or expense, which determines where it appears on the Balance Sheet or Profit and Loss report.

Products and Services items

Items used on sales forms carry an income account and a tax code, so item setup determines how revenue and sales tax post to the general ledger.

Undeposited Funds account

A holding account that temporarily records customer payments until a bank deposit is created, so the recorded deposit matches the single amount shown on the bank statement.

Reconciliation difference

After entering the statement ending balance and any service charges or interest, the difference must be zero to finish reconciling; otherwise transactions are unmatched or missing.

Closing date and password

Setting a closing date with a password restricts changes to transactions on or before that date, protecting prior-period reports and reducing accidental edits to closed books.

QuickBooks Audit Log

A record of who created, edited, or deleted transactions and list items, including date and time, used to support internal controls and investigate discrepancies.

Cash versus accrual reports

The Balance Sheet and Profit and Loss can be run on either basis. The report header toggle changes whether unpaid customer invoices and unpaid bills are included.

Journal entry requirements

A QuickBooks journal entry must contain at least two lines with equal total debits and credits. It is intended for adjustments rather than routine sales or purchase entry.

Net pay formula

Gross pay minus employee tax withholdings and employee deductions such as health insurance, retirement contributions, or garnishments equals net pay, the amount actually paid to the employee.

FICA tax rates

Social Security is 6.2% of wages up to the annual wage base set by the Social Security Administration. Medicare is 1.45% with no wage cap. Employers match both amounts.

FUTA net rate

Employers owe 6.0% on the first $7,000 of each employee's wages, reduced by a credit of up to 5.4% for state unemployment taxes paid, producing a net federal rate of 0.6%.

Form 941 due dates

The quarterly federal payroll tax return is due the last day of the month after each quarter ends: April 30, July 31, October 31, and January 31.

Overtime calculation

Under the FLSA, nonexempt employees earn 1.5 times their regular rate for hours worked beyond 40 in a single workweek, not for hours beyond 8 in a day.

Employee or contractor test

Worker classification depends on behavioral control, financial control, and the type of relationship. Misclassifying an employee as a contractor creates payroll tax and penalty exposure for the employer.

W-2 versus 1099-NEC

Form W-2 reports wages and tax withholdings for employees and is due by January 31. Form 1099-NEC reports $600 or more paid to nonemployees for services.

Employer payroll tax expense

The employer's share of Social Security and Medicare plus FUTA and SUTA. It is a business expense recorded separately from employee withholdings and does not reduce employee net pay.

Pay frequency gross pay

Salaried gross pay per period equals annual salary divided by pay periods: 52 weekly, 26 biweekly, 24 semimonthly, or 12 monthly. Hourly gross pay equals hours times rate.

Audience analysis

Before drafting, identify the reader's role, existing knowledge, and the action needed. Those factors determine the format, tone, and amount of detail in the message.

Effective subject line

States the topic and the required action or deadline in a few words, letting the reader prioritize and route the message without opening it first.

Bad news message structure

Open with a buffer, give the factual reason, state the decision clearly, and close courteously with alternatives. Avoid burying the decision or over-apologizing.

Active listening steps

Attend fully, paraphrase what was said, ask clarifying questions, and confirm understanding before responding. This reduces miscommunication during client meetings and interviews.

Client confidentiality

Client financial and payroll information is shared only with authorized parties. Social Security numbers and full account numbers should never be emailed unencrypted.

Contemporaneous documentation

Notes written at the time of a conversation, recording date, participants, issue, action taken, and follow-up owner, are far more credible than notes reconstructed later.

Meeting agenda elements

An agenda lists the objective, timed items, a responsible owner for each item, and the decisions needed. Circulating it in advance keeps meetings focused and shorter.