Review for Final Exam Fundamental Accounting Principles ch. 6-13
|FIFO||assigns the lowest amount of cost of goods sold.|
|LIFO||assigns the highest cost of goods sold.|
|Goods on consignment||goods shipped by the owner to another party who then sells them.|
|Promissory note||liability; note payable|
|Bad debts can be estimated with||an income statement focus (percent of sales) or with a balance sheet focus (percent of receivables or aging of receivables)|
|Straight-line depreciation|| Cost - Salvage Value divided by|
Useful life in periods
|Social Security Taxes||FICA|
|Contributing assets to join a partnership|| I. Cash Debit|
i. T. Rasheed, Capital. Credit
II. To record admission of Rasheed by investment
|Liquidation of a partnership||I. Record the sale of noncash assets for cash and any gain or loss from their liquidation|
II. Allocate any gain or loss from liquidation of the assets in step 1 to the partners using their income-and-loss-sharing ration.
III. Pay or settle all partner liabilities.
IV. Distribute any remaining cash to partners based on their capital balance.
|Preferred stock||more stable, doesn't offer same profit as common stock. Guarantees a regular dividend that isn't directly tied to the market. Tied to interest rate levels.|
|Common stock||can vote. Capital appreciation and dividends.|
|Statement of Retained earnings||Retained earnings + net income or - net loss - dividends|
|Statement of stockholders equity||lists the beginning and ending balances of key equity accounts and describes the changes that occur during the period.|
|Treasury stock||a corporation's reacquired shares.|
|Interest=||Principle x Rate x Time (360 days in a business year)|
|Accounts receivable Turnover=||Net Sale / Average accounts receivable|
|Straight Line Depreciation=||Cost of Asset - Salvage Value / Useful Life|