accounting

Created by mastorakosd 

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payments of a liability

credits cash debits accounts payable

DEALER

dividends expense asset liabilities equity revenue

comparibility

when different firms use the same accounting principle

consistency

company uses same accounting principles from period to period

cost principle

liabilities to be recorded at original cost

full disclosure principle

report what a reasonable person needs to know in order to make and informed decision

conservatism

company should choose the accounting method that will least likely overstate assets or income

cash and supplies are both classified as current assets?

true

buliding offered at 10 someone buys for 9 the would record as 10?

false

materiality

an item is material if it can influence the decision of an investor or creditor

the normal balance of a dividend account is a credit?

false

dividends appear on?

retained earnings statement

statement of cash flows

Operating activities, investing activities, finance activities

most important information to determine if companies can pay there current obligations

going concern assumption

receiving payment of a portion of accounts receviable will?

raise assets lower liabilities

what is not an advantage of corporate form of business

double taxation

GAAP

how info shud be recorded, what shud be disclosed, how should info be disclosed, what financial statements should be prepared

time period assumption

allows the business to be divided into artificial time periods like months quarters or years

balance sheet

statement that reports the assets and claims to those assets at a specific point in time

basic accounting equation

A= L + SE

CPA

mety certain criteria and is allowed to perform audits on certain corporations

common stock

total about paid in by stockholders for the shares they purchase

comparitive statements

a presentation of a companys financial statements for more than 1 year

corporation

business that has ownership divided into transferable shares

dividends

payments of cash to stockholders

expenses

the cost of assets consumed or services used in the process of generating revenue

income statement

presents revenues and expenses and resulting net income or net loss of a company for a specific period

liabilities

debts and obligations of a business. liabilities equals amount owed to creditors

net income

the amount where revenue exceeds expenses

net loss

expenses exceed revenue

notes to the financial statement

notes that clarify info presented in financial statement

partnership

business owned by two or more people

retained earnings

amount of net income retained in the corporation

retained earnings statement

summarizes the amounts and causes of changes in retained earnings for a specific period of time

revenue

increase in assets that result from the sale of a product or service in the normal course of business

sarbanes oxley act

passed by congress to reduce unethical corporate behavior

sole proprietorship

business owned by one person

statement of cash flows

provides financial information about the cash receipts and cash payments of a business for a specific period of time

stockholders equity

the owners claim on total assets

which accounts have credit balances

liabilities accoutns

trial balance is a listing of?

names and balances of all the accounts in the order in which they appear

if total liabilities increase then?

total assets increase

if services are rendered for cash

?

working capital

current assets- current liabilities

current ratio

current assets/ current liabilities

debt to total assets ration

liabilities/ total assets

earnings per share

net income - preffered dividends/ # of shares

revenue recognition principle

when it is earned without regard to when the payment is received

statements of cash flows begins with cash flows from?

the beggining balance

Monetary Unit Assumption

only trabsactions in terms of money be included in accounting records

economic entity assumption

economic events can be identified with a particular unit of accountability

time period assumption

business to be divided into artificial time periods

going concern assumption

assumes business will be in operation in the forseable future

collection of an account receiveable

credits accounts recevable debits cash

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