16 terms

Chapter 14 Accounting Terms

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Terms in this set (...)

retained earnings
an amount earned by a corporation and not yet distributed to stockholders
dividends
earnings distributed to stockholders
board of directors
a group of persons elected by the stockholders to manage a corporation
declaring a dividend
action by a board of directors to distribute corporate earnings to stockholders
merchandise inventory
the amount of goods on hand for sale to customers
uncollectable accounts
accounts receivable that cannot be collected
allowance method of recording losses from uncollectible accounts
crediting the estimated value of uncollectible accounts to a contra account.
book value
the difference between an asset's account balance and its related contra account balance
book value of accounts receivable
the difference between the balance of accounts receivable and its contra account, allowance for uncollectible accounts
current assets
cash and other assets expected to be exchanged for cash or consumed within a year
plant assets
assets that will be used for a number of years in the operation of a business
depreciation expense
the portion of a plant asset's cost that is transferred to an expense account in each fiscal period during a plant asset's useful life
estimated salvage value
the amount an owner expects to receive when a plant asset is removed from use
straight-line method of depreciation
charging an equal amount of depreciation expense for a plant asset in each year of useful life
accumulated depreciation
the total amount of depreciation expense that has been recorded since the purchase of a plant asset
book value of a plant asset
the original cost of a plant asset minus accumulated depreciation