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22 terms
Accounting I Chapter 8
Receivable
Debtor
Accounts Receivable
Note Receivable
A monetary claim against a business or an individual
The party to a credit transaction who takes on an obligation/…
The right to receive cash in the future from customers for go…
A written promise that a customer will pay a fixed amount of…
Receivable
A monetary claim against a business or an individual
Debtor
The party to a credit transaction who takes on an obligation/…
5 terms
Accounting Chapter 8
Permanent Accounts
Temporary Accounts
Closing Entries
Post-Closing Trial Balance
Accounts used to accumulate information from one fiscal perio…
Accounts used to accumulate information until it is transferr…
Journal entries used to prepare temporary accounts for a new…
A trial balance prepared after the closing entries are posted.
Permanent Accounts
Accounts used to accumulate information from one fiscal perio…
Temporary Accounts
Accounts used to accumulate information until it is transferr…
22 terms
Accounting Terms - Chapter 8
Accounts Receivable
Accounts Receivable Turnover Ratio
Acid Test Ratio
aging of receivables methods
the right to receive cash in the future from customers for go…
a ration that measures the number of times the company collec…
the ratio of the sum of cash cash equivalents, short - term i…
a method or estimating uncollectible receivables by determing…
Accounts Receivable
the right to receive cash in the future from customers for go…
Accounts Receivable Turnover Ratio
a ration that measures the number of times the company collec…
23 terms
accounting: chapter 8
plant assets
land improvements
depreciation
cost
tangible assets used in a company's operations that have a us…
additions to land and have limited useful lives. ex. parking…
the process of allocating the cost of a plant asset to expens…
all necessary and reasonable expenditures to acquire it and t…
plant assets
tangible assets used in a company's operations that have a us…
land improvements
additions to land and have limited useful lives. ex. parking…
11 terms
Accounting Chapter 8
Sole proprietorships
Partnerships
Corporation
Par value
are owned by a single individual who's responsible for making…
allow persons to share their talents, capital, and the risks…
a separate legal entity created by the authority of a state g…
The MAX liability of investors. Par value multiplied by the #…
Sole proprietorships
are owned by a single individual who's responsible for making…
Partnerships
allow persons to share their talents, capital, and the risks…
45 terms
Accounting Chapter 8
Classification
Inventories (Asset)
Business with Inventory
Merchandising Company
...
-Items held for sale in the ordinary course of business... -Good…
Merchandiser or Manufacturer
1 inventory account ... -Purchase merchandise in a form ready fo…
Classification
...
Inventories (Asset)
-Items held for sale in the ordinary course of business... -Good…
30 terms
accounting chapter 8
bank reconciliation
bank service charge
bank statement
bonding
the process of comparing the bank's balance of an account wit…
a fee charged by a bank for the use of its services
a monthly statement from the bank that shows the depositor's…
obtaining insurance protection against theft by employees
bank reconciliation
the process of comparing the bank's balance of an account wit…
bank service charge
a fee charged by a bank for the use of its services
6 terms
Accounting Chapter 8
Adjusting Entries
Permanent Accounts
Temporary Accounts
Closing Entries
Journal entries recorded to update general ledger accounts at…
Accounts used to accumulate information from one fiscal perio…
Accounts used to accumulate information until it is transferr…
Journal entries used to prepare temporary accounts for a new…
Adjusting Entries
Journal entries recorded to update general ledger accounts at…
Permanent Accounts
Accounts used to accumulate information from one fiscal perio…
34 terms
Accounting Chapter 8
Business Entity
Conservatism
Materiality
Disclosure
The personality of the business is separate and distinct from…
Income is recognized when it is earned and provide for all bu…
A business transaction is considered material if it makes a s…
Material events must be appropriately reported and communicat…
Business Entity
The personality of the business is separate and distinct from…
Conservatism
Income is recognized when it is earned and provide for all bu…
19 terms
Accounting Chapter 8
Fixed Asset
Depreciation
Accumulated depreciation
Net book value
A tangible resource that is expected to be used in operations…
The process of systematically and rationally allocating the c…
The cumulative amount of depreciation expense recognized to d…
The unexpired cost of a fixed asset... Net book value = Cost of…
Fixed Asset
A tangible resource that is expected to be used in operations…
Depreciation
The process of systematically and rationally allocating the c…
17 terms
Accounting Chapter 8
available-for-sale securities
consolidated financial statements
controlling (majority) interest
equity method
all investments not classified as held-to-maturity or trading…
financial statements of the parent company plus those of more…
ownership of more than 50% of an investee company's
the method used to account for investments in which the inves…
available-for-sale securities
all investments not classified as held-to-maturity or trading…
consolidated financial statements
financial statements of the parent company plus those of more…
19 terms
Accounting Chapter 8
errors
irregularities
Sarbanes-Oxley-Act
independent auditors
unintentional mistakes supposed to be prevented by internal c…
intentional mistakes supposed to be prevented by internal con…
all publicly traded U.S.... corporations are required to maintai…
must attest to the level of internal... control.
errors
unintentional mistakes supposed to be prevented by internal c…
irregularities
intentional mistakes supposed to be prevented by internal con…
10 terms
Accounting terms (Chapter 8)
Dishonored note
Accounts receivable
Maker
Direct write-off method
Note that is not paid in full at matuarity
Amounts owed by customers on account
The party in a promissory note who is making the promise to pay
Method of accounting for bad debts that involves expensing ac…
Dishonored note
Note that is not paid in full at matuarity
Accounts receivable
Amounts owed by customers on account
24 terms
Accounting Chapter 8
Acquisition Cost
Amortization
Capitalized Interest
Copyright
The net cash equivalent amount paid or to be paid for an asset
Systematic and rational allocation of the acquisition cost of…
Interest expenditures included in the cost of a self-construc…
Exclusive right to publish, use, and sell a literary, musical…
Acquisition Cost
The net cash equivalent amount paid or to be paid for an asset
Amortization
Systematic and rational allocation of the acquisition cost of…
13 terms
Accounting Chapter 8
Accounts Receivable
Notes Receivable
Other Receivables
Bad Debt Expense
Credit granted to customers for sales of merchandise or servi…
Credit granted through a formal credit instrument (promissory…
Ex: Interest Receivables, receivables associated with loans t…
Expense recorded from customers who do not pay. operating exp…
Accounts Receivable
Credit granted to customers for sales of merchandise or servi…
Notes Receivable
Credit granted through a formal credit instrument (promissory…
40 terms
Accounting Chapter 8
Accelerated depreciation method
Amortization
Asset book value
Betterments
Yields larger depreciation expenses in the early years of an…
A method for computing equal periodic payments for an install…
This is the net balance sheet amount and is computed as the a…
Expenditures that make a plant asset more efficient or produc…
Accelerated depreciation method
Yields larger depreciation expenses in the early years of an…
Amortization
A method for computing equal periodic payments for an install…
12 terms
Accounting Chapter 8
Adjusting entries
Permanent accounts
Temporary accounts
Closing entries
journal entries recorded to update general ledger accounts at…
accounts used to accumulate information from one fiscal perio…
balances must be reduced to zero at the end of each fiscal pe…
journal entries used to prepare temporary accounts for a new…
Adjusting entries
journal entries recorded to update general ledger accounts at…
Permanent accounts
accounts used to accumulate information from one fiscal perio…
22 terms
Chapter 8 Accounting Terms
Accounts Receivable
Accounts Receivable Turnover Ratio
Acid-Test Ratio
Aging-of-Receivables Method
Right to receive cash in the future from customers for goods…
Ratio that measures the number of times the company collects…
Ratio of the sum of cash plus short-term investments plus net…
Method of estimating uncollectible receivables by determining…
Accounts Receivable
Right to receive cash in the future from customers for goods…
Accounts Receivable Turnover Ratio
Ratio that measures the number of times the company collects…
18 terms
Accounting Chapter 8
Accounts receivable
Accounts receivable turnover
Aging the accounts reveivable
Allowance method
Amounts customers owe on account
A measure of the liquidity of accounts receivable, computed b…
A schedule of customer balances classified by the length of t…
A method of accounting for bad debts that involves estimating…
Accounts receivable
Amounts customers owe on account
Accounts receivable turnover
A measure of the liquidity of accounts receivable, computed b…
17 terms
Accounting Chapter 8
Budget
Cash Budget
Continuous Budget... Perpetual Budget
Control
A detailed plan for the future that is usually expressed in f…
A detailed plan showing how cash resources will be acquired a…
A twelve month budget that rolls forward one month as the cur…
The process of gathering feedback to ensure that a plan is be…
Budget
A detailed plan for the future that is usually expressed in f…
Cash Budget
A detailed plan showing how cash resources will be acquired a…
18 terms
Hospitality Accounting - Chapter 8
A`la carte menu
Average sale per guest
Break-even point
Contribution margin
menu where each item is priced separately
calculated by taking the total sales and dividing it by the n…
the level at which the revenue achieved in an operation equal…
the amount of sales remaining after variable costs have been…
A`la carte menu
menu where each item is priced separately
Average sale per guest
calculated by taking the total sales and dividing it by the n…
6 terms
Chapter 8 Accounting Terms
Accounting Cycle
Adjusting Entries
Closing Entries
Permanent Accounts
The series of accounting activities included in recording fin…
Journal entries recorded to update general ledger accounts at…
Journal entries used to prepare temporary accounts for a new…
Accounts used to accumulate information from one fiscal perio…
Accounting Cycle
The series of accounting activities included in recording fin…
Adjusting Entries
Journal entries recorded to update general ledger accounts at…
32 terms
Accounting Chapter 8
Plant Asset
Cost
Land Improvements
Depreciation
Tangible assets used in a company's operations that have a us…
All normal and reasonable expenditures necessary to get the a…
Additions to land that have a limited useful life... Ex:) Parki…
Process of allocating the cost of a plant asset to expense in…
Plant Asset
Tangible assets used in a company's operations that have a us…
Cost
All normal and reasonable expenditures necessary to get the a…
6 terms
Accounting - Chapter 8
Accounting Cycle
Adjusting Entries
Closing Entries
Permanent Accounts
The series of accounting activities included in recording fin…
Journal entries recorded to update general ledger accounts at…
Journal entries used to prepare temporary accounts for a new…
Accounts used to accumulate information from one fiscal perio…
Accounting Cycle
The series of accounting activities included in recording fin…
Adjusting Entries
Journal entries recorded to update general ledger accounts at…
5 terms
Accounting Chapter 8
permanent accounts
temporary accounts
closing entries
post-closing trial balance
accounts used to accumulate information from one fiscal perio…
accounts used to accumulate information until it is transferr…
journal entries used to prepare temporary accounts for a new…
a trial balance prepared after the closing entries are posted
permanent accounts
accounts used to accumulate information from one fiscal perio…
temporary accounts
accounts used to accumulate information until it is transferr…
5 terms
Accounting Chapter 8 Definitions
accounting cycle
closing entries
permanent accounts
post-closing trial balance
The series of accounting activities included in recording fin…
Journal entries used to prepare temporary accounts for a new…
Accounts used to accumulate information from one fiscal perio…
A trial balance prepared after the closing entries are posted.
accounting cycle
The series of accounting activities included in recording fin…
closing entries
Journal entries used to prepare temporary accounts for a new…
39 terms
Accounting terms: chapter 8
accelerated depreciation method
amortization
book value
betterments
method that produces larger depreciation charges in the early…
process of allocating the cost of an intangible asset to expe…
asset's acquisition costs less its accumulated depreciation (…
expenditures to make a plant asset more efficient or producti…
accelerated depreciation method
method that produces larger depreciation charges in the early…
amortization
process of allocating the cost of an intangible asset to expe…
Accounting chapter 8
fixed assets
recording fixed assets
depreciation
depreciation expense
a tangible resource that is expected to be used in operations…
purchase price, taxes on paid on the purchase, fees such as c…
the process of systematically and rationally allocating the c…
the portion of a fixed assets cost that is recognized as an e…
fixed assets
a tangible resource that is expected to be used in operations…
recording fixed assets
purchase price, taxes on paid on the purchase, fees such as c…
45 terms
accounting chapter 8
Receivables
types of receivables:
accounts receivables
notes receivable
amounts due from individuals and other companies that are exp…
accounts receivable, notes receivable, other receivables
amounts owed by customers that result from the sale of goods…
written promise(as evidenced by a formal instrument) for amou…
Receivables
amounts due from individuals and other companies that are exp…
types of receivables:
accounts receivable, notes receivable, other receivables
50 terms
Accounting Chapter 8
Wolford Stores, Inc., bought display s…
When land and building are purchased f…
The depreciatioon method required by t…
No matter which depreciation method is…
True
False
True
False
Wolford Stores, Inc., bought display s…
True
When land and building are purchased f…
False
Chapter 8 Accounting
After a supplier of merchandise is sel…
The entry to record a purchase of merc…
Freight charges on merchandise purchas…
The Purchases account is
a purchase order.
a debit to Purchases and a credit to Accounts Payable.
the Freight In account.
a temporary account.
After a supplier of merchandise is sel…
a purchase order.
The entry to record a purchase of merc…
a debit to Purchases and a credit to Accounts Payable.
36 terms
Accounting 221 Chapter 8 Vocab
Current (short-term) asset
Long-term operational assets
Tangible assets
Intangible assets
Asset that will be converted to cash or consumed within one y…
Assets used by a business, normally over multiple accounting…
Assets that have physical form, such as equipment, machinery,…
Long-term assets having no physical substance that benefit th…
Current (short-term) asset
Asset that will be converted to cash or consumed within one y…
Long-term operational assets
Assets used by a business, normally over multiple accounting…
18 terms
Accounting Chapter 8
Accounts receivable
accounts receivable turnover
aging the accounts receivable
allowance method
amounts customers owe on account
a measure of the liquidity of accounts receivable, computed b…
a schedule of customer balances classified by the length of t…
a method of accounting for bad debts that involves estimating…
Accounts receivable
amounts customers owe on account
accounts receivable turnover
a measure of the liquidity of accounts receivable, computed b…
5 terms
Accounting Terms Chapter 8
work sheet
ruling
matching principle
net income
A working paper used to collect information from ledger accou…
A single line drawn under a column of figures to signify that…
Principle stating that expenses are compared to revenues for…
The amount of revenue that remains after expenses for the per…
work sheet
A working paper used to collect information from ledger accou…
ruling
A single line drawn under a column of figures to signify that…
66 terms
Chapter 8 Accounting
What taxes are employers accounting fo…
Describe the journal entry to record p…
Describe the journal entry to record t…
Describe the journal entry to pay the…
FICA, State Unemployment tax, Federal Unemployment tax
Wages expense is debited.... Employees' Federal Income Tax pay…
Payroll Tax Expense is debited.... FICA Taxes Payable,... SUTA Pa…
Wages Payable is debited, Cash is credited.
What taxes are employers accounting fo…
FICA, State Unemployment tax, Federal Unemployment tax
Describe the journal entry to record p…
Wages expense is debited.... Employees' Federal Income Tax pay…
42 terms
ACCOUNTING CHAPTER 8
Accounts receivable
Notes Receivable
2 accounting issues for AR
service organization
amounts owed by customers that result from the sale of goods…
60-90 days, claims for which formal instruments of credit are…
recognizing accounts receivable and valuing accounts receivable
records a receivable when it provides service on account
Accounts receivable
amounts owed by customers that result from the sale of goods…
Notes Receivable
60-90 days, claims for which formal instruments of credit are…
10 terms
Accounting: Chapter 8
Permanent Accounts
Temporary Accounts
Closing Entries
Whenever a temporary account is closed,
-Accounts used to accumulate information from one fiscal peri…
-Accounts used to accumulate information until it is transfer…
Journal entries used to prepare temporary accounts for a new…
the closing entry must have equal debits and credits
Permanent Accounts
-Accounts used to accumulate information from one fiscal peri…
Temporary Accounts
-Accounts used to accumulate information until it is transfer…
25 terms
Accounting Chapter 8 Terms
Lump Sum (Basket) Purchase
Deprecation
Deprecation Factors
Deprecation formula
purchase of multiple assets for one price
the process of allocating a fixed assets cost to expand over…
Cost, Estimated useful Life, Salvage Value
Cost - Salvage Value = Decipherable Cost
Lump Sum (Basket) Purchase
purchase of multiple assets for one price
Deprecation
the process of allocating a fixed assets cost to expand over…
32 terms
Accounting Chapter 8
Internal Control
Public Company
Sarbanes-Oxley Act (SOX)
Internal Control Report
The organizational plan and all the related measures adopted…
A company that sells its stock to the general public
Requires companies to review internal control and take respon…
A report by management describing its responsibility for and…
Internal Control
The organizational plan and all the related measures adopted…
Public Company
A company that sells its stock to the general public
22 terms
Accounting Chapter 8
Faithful representation
Internal control
physical inventory
Control environment
the qualitative characteristic of information that financial…
the process that achieves this goal by establishing the relia…
This process involves an actual count of all merchandise on h…
created by management's overall attitude, awareness, and acti…
Faithful representation
the qualitative characteristic of information that financial…
Internal control
the process that achieves this goal by establishing the relia…
20 terms
Accounting-Chapter 8
bank reconciliation
bank service charge
bank statement
bonding
the process of comparing the bank's balance of an account wit…
a fee charged by a bank for the use of its services
a monthly statement from the bank that shows the depositor's…
obtaining insurance protection against misappropriation of as…
bank reconciliation
the process of comparing the bank's balance of an account wit…
bank service charge
a fee charged by a bank for the use of its services
30 terms
Financial Accounting Chapter 8
acquisition cost
additions and improvements
amortization
capital expenditures
net cash equivalent amount paid or to be paid for the asset
infrequent expenditures that increase an assets economic usef…
systematic and rational allocation of the acquisition cost of…
increase the productive life, operating efficiency, or capaci…
acquisition cost
net cash equivalent amount paid or to be paid for the asset
additions and improvements
infrequent expenditures that increase an assets economic usef…
6 terms
Accounting: Chapter 8 Vocabulary
adjusting entries
permanent accounts
temporary accounts
closing entries
journal entries recorded to update general ledger accounts at…
accounts used to accumulate information from one fiscal perio…
accounts used to accumulate information until it is transferr…
journal entries used to prepare temporary accounts for a new…
adjusting entries
journal entries recorded to update general ledger accounts at…
permanent accounts
accounts used to accumulate information from one fiscal perio…
46 terms
Accounting Chapter 8
Long lived assets
tangible assets (fixed assets)
Intangible assets
Types of tangible assets
Tangible and intangible resources owned by a business and use…
Assets that have physical substance
Assets that have special rights but not physical substance.
1. Land... 2. Buildings, fixtures, and equipment... 3. Natural reso…
Long lived assets
Tangible and intangible resources owned by a business and use…
tangible assets (fixed assets)
Assets that have physical substance
28 terms
Chapter 8 - accounting
classifying long-lived assets
tangible assets
intangible assets
fixed asset turnover
tangible and intangible resources owned by a business and use…
aka fixed assets, have a physical substance
have a special rights but no physical substance
ratio measures a company's ability to generate sales given an…
classifying long-lived assets
tangible and intangible resources owned by a business and use…
tangible assets
aka fixed assets, have a physical substance
14 terms
Financial Accounting Chapter 8
Accounts Receivable
Aging of Accounts Receivable Method
Allowance Method
Bad Debt Expense
Amounts owed to the business by customers for past transactio…
Using the age of each account receivable to estimate uncollec…
Bases bad debt expense on an estimate of uncollectible accoun…
Expense associated with estimated uncollectible accounts rece…
Accounts Receivable
Amounts owed to the business by customers for past transactio…
Aging of Accounts Receivable Method
Using the age of each account receivable to estimate uncollec…
6 terms
Accounting- Chapter 8 Vocabulary
accounting cycle
adjusting entries
closing entries
permanent accounts
The series of accounting activities included in recording fin…
Journal entries recorded to update general ledger accounts at…
Journal entries used to prepare temporary accounts for a new…
Accounts used to accumulate information from one fiscal perio…
accounting cycle
The series of accounting activities included in recording fin…
adjusting entries
Journal entries recorded to update general ledger accounts at…
27 terms
Chapter 8 Accounting
Accounts Receivable (pg.362)
Receivables (pg.362)
Credit- Granting Policy (pg.363)
Credit-Collection Policy (pg.363)
A current asset that is created by a sale of merchandise or t…
Receivables may be classified as either a current asset or a…
A policy to determine which customers to grant credit and how…
A policy establishing the amount of time that customers are a…
Accounts Receivable (pg.362)
A current asset that is created by a sale of merchandise or t…
Receivables (pg.362)
Receivables may be classified as either a current asset or a…
16 terms
Accounting Chapter 8
Budget
Planning
Control
Advantages of Budgeting
- detailed plan... -future... -expressed in formal quantitative ter…
-develop goals... -prepare multiple budgets to achieve goals... -ne…
-gather feedback... -going according to plan... -depending on what…
1. communicate management's plan... 2. force managers to think a…
Budget
- detailed plan... -future... -expressed in formal quantitative ter…
Planning
-develop goals... -prepare multiple budgets to achieve goals... -ne…
22 terms
Accounting - Chapter 8
accounts receivable
accounts receivable turnover ratio
acid-test ratio
aging-of-receivables method
the right to receive cash in the future from customers for go…
a ratio that measures the number of times the company collect…
(cash including cash equivalents +short-term investments +net…
a method of estimating uncollectible receivables by determini…
accounts receivable
the right to receive cash in the future from customers for go…
accounts receivable turnover ratio
a ratio that measures the number of times the company collect…
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