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Study sets matching "accounting chapter 9"

19 terms
Accounting Principles Chapter 9
Financial Statements
Income Statement
Evaluate
Illustrates
Reports prepared to summarize the changes resulting from busi…
A report of net income or net loss for a specific period
To determine value or worth after careful consideration
To make clear or explain by example or comparison
Financial Statements
Reports prepared to summarize the changes resulting from busi…
Income Statement
A report of net income or net loss for a specific period
54 terms
Intermediate Accounting: Chapter 9
Lower-of-cost-or-market
Cost
Market (for LCM)
Market
Lower-of-cost-or-market - Inventories are recorded at their c…
Recall that cost is the acquisition price of inventory comput…
Market (for LCM)... The cost to replace an inventory item by pur…
INTERNATIONAL PERSPECTIVE ... IFRS defines market as net realiza…
Lower-of-cost-or-market
Lower-of-cost-or-market - Inventories are recorded at their c…
Cost
Recall that cost is the acquisition price of inventory comput…
9 terms
Accounting chapter 9
Three Classification of Receivables
Accounts Receivable
Notes Receivable
Other Receivable
Accounts Receivable, Notes receivable, Other Receivable
A receivable created from selling merchandise or services
Customer writes a promise that they will pay an amount and po…
Include Interest receivable, taxes receivable and receivables…
Three Classification of Receivables
Accounts Receivable, Notes receivable, Other Receivable
Accounts Receivable
A receivable created from selling merchandise or services
26 terms
Accounting- Chapter 9
Accounts payable turnover
accrued expense/liability
bonds payable
callable bond
the number of times per year a company pays off its accounts…
an expense/liability incurred but not yet paid in cash
groups of debt securities issued to multiple lenders called b…
bonds that are paid off early at a specified price at the opt…
Accounts payable turnover
the number of times per year a company pays off its accounts…
accrued expense/liability
an expense/liability incurred but not yet paid in cash
34 terms
Accounting Chapter 9 Vocab
Amortization
Book Value
Capitalize
Depletion
process of allocating the cost of intangible assets over thei…
the acquisition cost of an asset minus accumulated depreciation
to record a cost as an asset rather than an expense
the process of allocating a natural resource's cost over a pe…
Amortization
process of allocating the cost of intangible assets over thei…
Book Value
the acquisition cost of an asset minus accumulated depreciation
15 terms
Chapter 9; Accounting 1
financial statements
income statements
statement of changes in owner's equity
balance sheet
reports prepared to summarize the changes resulting from busi…
a repot of the net income or net loss for a specific period;…
a financial statement that summarizes changes in the owner's…
a report statement that summarizes the cash receipts and cash…
financial statements
reports prepared to summarize the changes resulting from busi…
income statements
a repot of the net income or net loss for a specific period;…
Chapter 9 Accounting
accelerated depreciation method
additions and improvements
amortization
asset turnover
a depreciation method that produces higher depreciation expen…
costs incurred to increase the operating efficiency, producti…
the process of allocating to expense the cost of an intangibl…
indicates how efficiently a company uses its assets to genera…
accelerated depreciation method
a depreciation method that produces higher depreciation expen…
additions and improvements
costs incurred to increase the operating efficiency, producti…
8 terms
Introduction to Financial Accounting Chapter 9
What are current liabilities?
What are accounts payable?
What are short-term notes payable?
What is the current portion of long te…
Obligations that are due within one year
Amounts owed to suppliers for goods or services purchased on…
Formal written promises to pay cash to a creditor within one…
The next twelve months of monthly installments related to a l…
What are current liabilities?
Obligations that are due within one year
What are accounts payable?
Amounts owed to suppliers for goods or services purchased on…
16 terms
Accounting 201 Chapter 9
Accounts Receivable
Accounts Receivable Turnover
Aging of Accounts Receivable
Allowance for Doubtful Accounts
Amounts due from customers for credit sales. Backed by the cu…
Measure of both the quality and liquidity of accounts receiva…
Process of classifying accounts receivable by how long they a…
Contra asset account with a balance approximating uncollectib…
Accounts Receivable
Amounts due from customers for credit sales. Backed by the cu…
Accounts Receivable Turnover
Measure of both the quality and liquidity of accounts receiva…
16 terms
Chapter 9 Vocab Accounting
receivables
AR
NR
bad debt expense
includes all money claims against other entities, including p…
debit- most common transaction is selling merchandise or serv…
amounts that customers owe, more formal, more than 60 days, u…
operating expense recorded from uncollectible receivables, un…
receivables
includes all money claims against other entities, including p…
AR
debit- most common transaction is selling merchandise or serv…
38 terms
Computerized Accounting Chapter 9
Accounts Payable Ledger
Articles of Incorporation
Capital
Capital Stock
the subsidiary ledger containing vendor accounts
A legal document that identifies basic characteristics of a c…
The assets or other financial resources avaliable to a business
The total shares of ownership in a corporation
Accounts Payable Ledger
the subsidiary ledger containing vendor accounts
Articles of Incorporation
A legal document that identifies basic characteristics of a c…
19 terms
Accounting 201 Chapter 9
Plant Assets
Cost Principle
Cost
Revenue Expenditure
Resources with physical substance used in the operations of a…
Requires plant assets to be recorded at cost
All expenditures necessary to acquire an asset and make it re…
The cost is expensed immediately
Plant Assets
Resources with physical substance used in the operations of a…
Cost Principle
Requires plant assets to be recorded at cost
29 terms
Accounting 1 Chapter 9 Vocab
merchandise
merchandising business
retail merchandising business
wholesale merchandising business
goods that a business purchases to sell
a business that purchases and sells goods
a merchandising business that sells to those who use or consu…
a business that buys and resells merchandise to retail mercha…
merchandise
goods that a business purchases to sell
merchandising business
a business that purchases and sells goods
5 terms
Accounting 225 Chapter 9
Flexible Budget
Flexible Budget Application
Activity Variance
Revenue and Spending Variances
AQ x SR or SP
actual costs are compared to what the costs should have been…
compares flexible budget to planned budget
compare actual results to flexible budget
Flexible Budget
AQ x SR or SP
Flexible Budget Application
actual costs are compared to what the costs should have been…
41 terms
Accounting Chapter 9 Purchases and Cash Payments
Merchandise
Merchandising Business
Retail merchandising business
Wholesale merchandising business
Goods that a business purchases to sell
A business that purchases and resells goods
business that sells to those who use or costume the goods
Business that buys and resells merchandise primarily to other…
Merchandise
Goods that a business purchases to sell
Merchandising Business
A business that purchases and resells goods
22 terms
Tax Accounting Chapter 9
adjusted basis
amount realized
bargain purchases
carryover basis
The original basis, plus or minus changes in the amount of un…
Capital is recovered at disposition by offsetting the adjuste…
A true bargain purchase is taxable to the buyer. Such a purch…
Indicates that all or part of an asset's basis transfers from…
adjusted basis
The original basis, plus or minus changes in the amount of un…
amount realized
Capital is recovered at disposition by offsetting the adjuste…
24 terms
Chapter 9- Accounting for Receivables
receivable
debit Accounts Receivable, credit sale…
debit cash, credit Accounts Receivable
Customer's credit is evaluated by cred…
an amount due from another party
journal entry for sales on credit
Journal entry for payment from customer of sales on credit
Advantages of allowing customers to use credit cards
receivable
an amount due from another party
debit Accounts Receivable, credit sale…
journal entry for sales on credit
16 terms
Principles of Accounting Chapter 9
Accounts Receivable
Accounts Receivable Turnover
Aging of Accounts Receivable
Allowance for Doubtful Accounts
Amounts due from customers for credit sales; backed by the cu…
Measure of both the quality and liquidity of accounts receiva…
Process of classifying accounts receivable by how long they a…
Contra asset account with a balance approximating uncollectib…
Accounts Receivable
Amounts due from customers for credit sales; backed by the cu…
Accounts Receivable Turnover
Measure of both the quality and liquidity of accounts receiva…
Chapter 9: Accounting for Current Liabilities and Payroll
Warranty
JE for Warranty Exp
Warranty Obligations EX:
Notes Payable
promises made by the seller to refund, repair, or replace def…
Estimate [in year of sale]: ... Dr. Warranty Exp ... Cr. Warranty P…
$450,000 of product sold, 2 yr warranty, estimated warranty e…
a liability account set up when a company takes out a loan fr…
Warranty
promises made by the seller to refund, repair, or replace def…
JE for Warranty Exp
Estimate [in year of sale]: ... Dr. Warranty Exp ... Cr. Warranty P…
11 terms
Financial Accounting Chapter 9
average-cost method
cost of goods available for sale
cost of goods purchased
cost of goods sold
inventory costing method that assumes that the goods availabl…
the sum of the beginning merchandise inventory plus cost of g…
the sum of net purchases plus freight-in
the total cost of merchandise sold during a period , determin…
average-cost method
inventory costing method that assumes that the goods availabl…
cost of goods available for sale
the sum of the beginning merchandise inventory plus cost of g…
27 terms
Accounting Chapter 9 Vocabulary
accelerated depreciation method
additions and improvements
amortization
asset turnover
a depreciation method that produces higher depreciation expen…
costs incurred to increase the operating efficiency, producti…
the process of allocating to expense the cost of an intangibl…
indicates how efficiently a company uses its assets to genera…
accelerated depreciation method
a depreciation method that produces higher depreciation expen…
additions and improvements
costs incurred to increase the operating efficiency, producti…
14 terms
Accounting Chapter 9 (Mr. Daniels)
Financial Statements
Income Statement
Statement of changes in owner's equity
Balance Sheet
Summarized the changes resulting from business transactions t…
Reports the net income or the net loss for the period.
Summarizes the changes in the owner's capital account as a re…
Report of the balances in all asset, liablity, and owner's eq…
Financial Statements
Summarized the changes resulting from business transactions t…
Income Statement
Reports the net income or the net loss for the period.
28 terms
Accounting 2036 Chapter 9
sole proprietorship
unlimited liability
limited life
partnership
a company owed by one person who is the sole investor of capi…
statement that says that the owner of a sole proprietorship m…
span of sole proprietorship because if a owner decides to sto…
a company owned by 2 or more individuals who each invest capi…
sole proprietorship
a company owed by one person who is the sole investor of capi…
unlimited liability
statement that says that the owner of a sole proprietorship m…
65 terms
Accounting chapter 9-11
The cost of a purchased building inclu…
_____ (asset) does not decline in serv…
Depreciation
The book value of an asset is equal to…
closing cost,real estate broker's commission, remodeling cost
land
is the process of allocating the cost of a plant asset over i…
less
The cost of a purchased building inclu…
closing cost,real estate broker's commission, remodeling cost
_____ (asset) does not decline in serv…
land
15 terms
Chapter 9 Accounting
Why is the direct write-off method an…
When recording bad debts expense, the…
A company uses the accrual basis of ac…
For which of the following methods of…
-It makes no effort to match an estimated bad debts expense t…
-Percent of accounts receivables method.... -Percent of sales me…
-At the end of any interim period and at the end of the annua…
-The percent of accounts receivables method.
Why is the direct write-off method an…
-It makes no effort to match an estimated bad debts expense t…
When recording bad debts expense, the…
-Percent of accounts receivables method.... -Percent of sales me…
9 terms
Financial Accounting: Chapter 9
plant asset
depreciation
cost principle
land improvement
long-lived, tangible asset such as land, buildings, and equip…
the process by which businesses spread the allocation of a pl…
a principle that states that acquired assets and services sho…
a depreciable improvement to land, such as fencing, sprinkler…
plant asset
long-lived, tangible asset such as land, buildings, and equip…
depreciation
the process by which businesses spread the allocation of a pl…
16 terms
Managerial Accounting Chapter 9
Contribution Margin Per Unit Of Scarce…
Differential Analysis
Full Cost Pricing
Incremental Analysis Approach
The contribution margin per unit of output divided by the qua…
The revenue and cost differences among alternatives.
The pricing method that adds a markup to the full cost of a p…
An approach to decision making that uses only the changed rev…
Contribution Margin Per Unit Of Scarce…
The contribution margin per unit of output divided by the qua…
Differential Analysis
The revenue and cost differences among alternatives.
29 terms
Accounting Terms Chapter 9
merchandise
merchandising business
retail merchandising business
wholesale merchandising business
goods that a business purchases to sell
a business that purchases goods and sells goods
a merchandising business that sells to those who use or consu…
a business that buys and resells merchandise to retail mercha…
merchandise
goods that a business purchases to sell
merchandising business
a business that purchases goods and sells goods
15 terms
Accounting: Chapter 9-1 Key Terms
Merchandise
Merchandising Business
Retail Merchandising Business
Wholesale Merchandising Business
Goods that a business purchases to sell
A business that purchases and resells goods
A merchandising business that sells to those who use or consu…
buys and resells merchandise primarily to other merchandising…
Merchandise
Goods that a business purchases to sell
Merchandising Business
A business that purchases and resells goods
14 terms
Accounting 1 Chapter 9
Financial Statements
Income Statement
Statement of Changes in Owners Equity
Balance Sheet
Reports prepared to summarize the changes resulting from a bu…
A report of net income or net loss for a specific period; som…
A financial statement changes in the owners capital account a…
A report of the balances in the permanent accounts on a speci…
Financial Statements
Reports prepared to summarize the changes resulting from a bu…
Income Statement
A report of net income or net loss for a specific period; som…
29 terms
Accounting - Chapter 9
capital stock
cash discount
cash over
cash payments journal
total shares of ownership in a corporation
a deduction that a vendor allows on the invoice amount to enc…
a petty cash on hand amount that is more than a recorded amount
a special journal used to record only cash payment transactions
capital stock
total shares of ownership in a corporation
cash discount
a deduction that a vendor allows on the invoice amount to enc…
26 terms
Chapter 9 Accounting Game
A cash sale of merchandise would be re…
Upon collection of the amount due on a…
Most businesses use the petty cash fun…
The payment of a purchase invoice when…
Cash Receipts Journal
credit Interest Income.
small expenditures.
debit to Accounts Payable, a credit to Purchases Discounts, a…
A cash sale of merchandise would be re…
Cash Receipts Journal
Upon collection of the amount due on a…
credit Interest Income.
53 terms
Accounting Chapter 9
What types of assets are there?
Current Assets
Non-current (Long-Term) Assets
Property, Plant, and Equipment (PP&E)
Current and non-current
Cash, accounts receivable, inventory
Property Plant and Equipment (PP&E), Land, Intangible Assets
plant assets, fixed assets
What types of assets are there?
Current and non-current
Current Assets
Cash, accounts receivable, inventory
26 terms
Financial Accounting Chapter 9
Accelerated-Depreciation Method
Additions and Improvements
Amortization
Asset Turnover
Depreciation method that produces higher depreciation expense…
Costs incurred to increase the operating efficiency, producti…
The allocation of the cost of an intangible asset to expense…
A measure of how efficiently a company uses its assets to gen…
Accelerated-Depreciation Method
Depreciation method that produces higher depreciation expense…
Additions and Improvements
Costs incurred to increase the operating efficiency, producti…
29 terms
Century 21 Accounting Chapter 9
Merchandise
Merchandising Business
Retail Merchandising Business
Wholesale Merchandising Business
Goods that a business purchases to sell
A business that purchases and sells goods
A merchandising business that sells to those who use or consu…
A business that buys and resells merchandise to retail mercha…
Merchandise
Goods that a business purchases to sell
Merchandising Business
A business that purchases and sells goods
5 terms
Accounting Chapter 9
plant assets
tangible assets
intangible assets
natural resources
A stream of future services or long term prepaid assets like…
long-term assets having physical substance. land, buildings,…
concurrent assets with no physical substance. patents, copyri…
sites are purchased for the extraction of this. oil, timber e…
plant assets
A stream of future services or long term prepaid assets like…
tangible assets
long-term assets having physical substance. land, buildings,…
13 terms
Accounting Final 1- Chapter 9
Historical Cost Principle
Included in Cost of Land
Included in Cost of Land Improvements
Included in Cost of Buildings
Historical Cost Principle - requires that companies record pl…
•Cash purchase price, ... •Closing costs such as title and attor…
•Expenditures necessary to make the improvements ready for th…
•Includes all costs related directly to purchase or construct…
Historical Cost Principle
Historical Cost Principle - requires that companies record pl…
Included in Cost of Land
•Cash purchase price, ... •Closing costs such as title and attor…
42 terms
Financial Accounting Chapter 9
Working Capital
Current Ratio
Liquidity
Operating Assets
The difference between a firm's current assets and its curren…
Also called working capital ratio... Current assets/current liab…
Refers to a firms ability to meet short term obligations as t…
Assets not involved in financing
Working Capital
The difference between a firm's current assets and its curren…
Current Ratio
Also called working capital ratio... Current assets/current liab…
15 terms
Financial Accounting Chapter 9
Bond
Secured Bond
Unsecured Bond
Junk Bonds
A type of note that requires the issuing entity to pay face v…
Has some collateral. EX: Mortgage bonds are secured by real e…
Most bonds are unsecured. There is no collateral. The lender…
These are unsecured bonds where the risk of the borrower fail…
Bond
A type of note that requires the issuing entity to pay face v…
Secured Bond
Has some collateral. EX: Mortgage bonds are secured by real e…
16 terms
Accounting 201 Chapter 9
Accounts Receivable
Accounts Receivable Turnover
Aging of Accounts Receivable
Allowance for Doubtful Accounts
Amounts due from customers for credit sales. Backed by the cu…
Measure of both the quality and liquidity of accounts receiva…
Process of classifying accounts receivable by how long they a…
Contra asset account with a balance approximating uncollectib…
Accounts Receivable
Amounts due from customers for credit sales. Backed by the cu…
Accounts Receivable Turnover
Measure of both the quality and liquidity of accounts receiva…
81 terms
Intermediate Accounting Chapter 9
Inventory
nature of the business
raw materials, work in process, and fi…
raw materials
assets held for sale in the normal course of business; also,…
The type of items included in the inventory of a merchandisin…
Three types of inventory for a manufacturing firm
inventory acquired by a manufacturer for use in the productio…
Inventory
assets held for sale in the normal course of business; also,…
nature of the business
The type of items included in the inventory of a merchandisin…
21 terms
Financial Accounting Chapter 9
Land
Fixed assets
Natural resource costs
Intangible assets
includes the cost of real estate used in the operations of a…
include buildings, machinery and equipment, and are often loc…
include the costs often associated with acquiring the rights…
characterized by rights, privileges, and benefits of possessi…
Land
includes the cost of real estate used in the operations of a…
Fixed assets
include buildings, machinery and equipment, and are often loc…
Accounting Chapter 9
accelerated depreciation method
additions and improvements
amortization
asset turnover
a depreciation method that produces higher depreciation expen…
costs incurred to increase the operating efficiency, producti…
the process of allocating to expense the cost of an intangibl…
indicates how efficiently a company uses its assets to genera…
accelerated depreciation method
a depreciation method that produces higher depreciation expen…
additions and improvements
costs incurred to increase the operating efficiency, producti…
31 terms
Chapter 9 Accounting
accounts payable turnover
accrued expense
accrued liability
bonds payable
the number of times per year a company pays off its accounts…
an expense incurred but not yet paid in cash. Also called acc…
a liability for an expense that has not yet been paid. Also c…
groups of debt securities issued to multiple lenders called b…
accounts payable turnover
the number of times per year a company pays off its accounts…
accrued expense
an expense incurred but not yet paid in cash. Also called acc…
29 terms
Accounting Chapter 9 Theory
Merchandise
Merchandising Business
Retail Merchandising Business
Wholesale Merchandising Business
Goods that a business purchases to sell
A business that purchases and sells goods
A merchandising business that sells to those who use or consu…
A business that buys and resells merchandise to retail mercha…
Merchandise
Goods that a business purchases to sell
Merchandising Business
A business that purchases and sells goods
6 terms
Accounting 221: Chapter 9
contingent liability
Accounting standards require companies…
Probable and estimable
reasonably probable
a potential obligation arising from a past event. The amount…
1) Probable and estimable... 2) reasonably probable... 3) remote
recognize in financial statements
disclose in footnotes of f/s
contingent liability
a potential obligation arising from a past event. The amount…
Accounting standards require companies…
1) Probable and estimable... 2) reasonably probable... 3) remote
29 terms
Accounting 1 Chapter 9
merchandise
merchandising business
retail merchandising business
wholesale merchandising business
Goods that a business purchases to sell
A business that purchases and sells goods
a merchandising business that sells to those who use or consu…
A business that buys and resells merchandise to retail mercha…
merchandise
Goods that a business purchases to sell
merchandising business
A business that purchases and sells goods
23 terms
Accounting Foundations: Chapter 9
conversion process
job order
job order
process
this changes the form, fit, or function of a raw material to…
type of cost system in which costs are assigned to each job o…
Which cost system involves unique jobs and low volumes of inv…
type of cost system that is used when a large volume of simil…
conversion process
this changes the form, fit, or function of a raw material to…
job order
type of cost system in which costs are assigned to each job o…
22 terms
Chapter 9 Accounting
Benefits of Budgeting
Planning
Motivation
Evaluation
Planning, motivation, evaluation, communication, coordination…
Quantifiable product of planning process. Forces planning per…
Can use budget to motivate managers to improve performance.
Budget is used to measure performance of organizations,
Benefits of Budgeting
Planning, motivation, evaluation, communication, coordination…
Planning
Quantifiable product of planning process. Forces planning per…
22 terms
Intermediate Accounting Chapter 9
average days to sell inventory
conventional retail inventory method
cost-of-goods-sold method
cost-to-retail ratio
A measure that represents the average number of days' sales f…
A method of valuing ending inventory that uses only a cost ra…
A method of valuing inventory in which cost of goods sold is…
The total goods available for sale at cost divided by the tot…
average days to sell inventory
A measure that represents the average number of days' sales f…
conventional retail inventory method
A method of valuing ending inventory that uses only a cost ra…
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