Create an account
expenses should be recorded in the same time period as the revenue they helped to earn
business form that serves as the original source of info that a transaction has occurred
interpreting accounting data from condensed financial statements and predicting future results
relationship between easily convertible assets and current liabilities
=Current Assets (easy)/Current Liabilities : 1
The Business Entity Principle
each business is considered a separate unit or entity. The financial data for a business must be kept separate from personal data.
a business form that serves as the original source of information that a transaction has occurred
-cash sales slip
-bank credit memo
Principle of conservatism
accountants should choose accounting methods that result in lower net income and net assets
Schedule of Cost of Goods Sold
Merchandise Inventory, Dec1
Less: Purchases Returns/Allowances
Net Purchase Cost
Total Cost of Merchandise Purchased
Cost of Merchandise Avaiable for Sale
Less: Merchandise Inventory, Dec 31
Cost of Goods Sold
Journalizing Batch Tools
recording the total of a number of source documents of one type in a single entry
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