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Study sets matching "accounting principles chapter 6"

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Study sets matching "accounting principles chapter 6"

Principles of Accounting Chapter 6
Average-cost method
Consigned goods
Consistency concept
Current replacement cost
Inventory costing method that uses the weighted-average unit…
Goods held for sale by one party although ownership of the go…
Dictates that a company use the same accounting principles an…
The current cost to replace an inventory item.
Average-cost method
Inventory costing method that uses the weighted-average unit…
Consigned goods
Goods held for sale by one party although ownership of the go…
17 terms
Accounting Principles Chapter 6
Comparable Store Saes
Contra-revenue Account
Control Account
Cost of Goods Sold
A comparison of sales figures at established stores with exis…
A debit balance account that is offset against revenue in the…
A general ledger account that summarizes the content of a spe…
The cost to a merchandising company of the goods it has sold…
Comparable Store Saes
A comparison of sales figures at established stores with exis…
Contra-revenue Account
A debit balance account that is offset against revenue in the…
12 terms
Principles of Accounting Chapter 6
NET REALIZABLE VALUE
FIRST-IN, FIRST-OUT (FIFO)
LAST-IN, FIRST-OUT (LIFO)
SPECIFIC IDENTIFICATION or SI (specifi…
sales price minus the cost of making the sale
assumes costs flow in the order incurred. Method of assigning…
assumes costs flow in the reverse order incurred. Method of a…
when each item in inventory can be identified with a specific…
NET REALIZABLE VALUE
sales price minus the cost of making the sale
FIRST-IN, FIRST-OUT (FIFO)
assumes costs flow in the order incurred. Method of assigning…
33 terms
Principles of Accounting Chapter 6
Revenues less operating expenses and s…
the form of balance sheet that resembl…
discounts from the list of prices in p…
freight terms in which the seller pays
Income from operations
account form
trade discounts
FOB destination
Revenues less operating expenses and s…
Income from operations
the form of balance sheet that resembl…
account form
16 terms
Fundamental Accounting Principles Chapter 6
average cost
conservatism constraint
consignee
consignor
See weighted average.
Principle that prescribes the less optimistic ... estimate when…
Receiver of goods owned by another who holds them for ... purpos…
Owner of goods who ships them to another party who will ... sell…
average cost
See weighted average.
conservatism constraint
Principle that prescribes the less optimistic ... estimate when…
14 terms
Principles of Accounting: Chapter 6
Conservative constraint
Consignee
Consignor
Consistency concept
Principle that prescribes the less optimistic estimate when t…
Receiver of goods owned by another who holds them for purpose…
Owner of goods held by another party who will sell them for t…
Principle that prescribes use of the same accounting methods…
Conservative constraint
Principle that prescribes the less optimistic estimate when t…
Consignee
Receiver of goods owned by another who holds them for purpose…
24 terms
Principles of Accounting I Chapter 6
raw materials inventory
work-in-process inventory
finished goods inventory
just-in-case inventory
includes raw materials and components that have been purchase…
consists of units of product that have been placed into produ…
includes all units that have been fully manufactured and are…
extra quantity of inventory that a firm carries just in case…
raw materials inventory
includes raw materials and components that have been purchase…
work-in-process inventory
consists of units of product that have been placed into produ…
13 terms
Principles of Financial Accounting - Chapter 6
Inventory is an
Perpetual method
Principles related to inventory
consistency
asset
most companies use... give exact dates for sales from exact purc…
consistency, conservatism, materiality
companies can choose which inventory method to use but cannot…
Inventory is an
asset
Perpetual method
most companies use... give exact dates for sales from exact purc…
17 terms
Principles of Accounting Level 1 - Chapter 6
Amortization
Betterment
Capital Expenditures
Changes in Estimates
The process of allocating cost to the benefited time periods.
A capital expenditure for an improvement.
Ordinary and necessary costs such as direct purchase price an…
To revise the accounting to adjust only current and future pe…
Amortization
The process of allocating cost to the benefited time periods.
Betterment
A capital expenditure for an improvement.
26 terms
Principles of Accounting - Chapter 6
good in transit
goods on consignment
net realizable value
determining inventory costs
if ownership has passed to the purchaser, the goods are inclu…
goods shipped by the owner, called the consignor to another p…
damaged and obsolete and deteriorated goods are not counted i…
the cost of an inventory item includes its invoice cost minus…
good in transit
if ownership has passed to the purchaser, the goods are inclu…
goods on consignment
goods shipped by the owner, called the consignor to another p…
15 terms
Principles of accounting chapter 6
Sales
Gross profit
Merchandise inventory
Perpetual inventory system
When merchandise is sold the revenue is reported as
Profit before deducting operating expense
Merchandise on hand
Each purchase and sale of merchandise is recorded in the inve…
Sales
When merchandise is sold the revenue is reported as
Gross profit
Profit before deducting operating expense
21 terms
Principles Of Accounting: Chapter 6
Sales
Cost of Merchandise Sold
Gross Profit
Merchandise Inventory
When merchandise is sold and its cost is recognized as an exp…
The expense of a sales cost. The cost of merchandise sold is…
It is the profit before deducting operating expenses.
Merchandise on hand (not sold) at the end of an accounting pe…
Sales
When merchandise is sold and its cost is recognized as an exp…
Cost of Merchandise Sold
The expense of a sales cost. The cost of merchandise sold is…
17 terms
Principles of Accounting--Chapter 6
Why are accounting principles important?
The accounting principles associated w…
Consistency Principle
Why is consistency important?
Accounting principles help accountants classify and report it…
1. Consistency... 2. Disclosure... 3. Materiality... 4. Accounting con…
States that a business should use the same accounting methods…
Consistency helps investors and creditors compare financial s…
Why are accounting principles important?
Accounting principles help accountants classify and report it…
The accounting principles associated w…
1. Consistency... 2. Disclosure... 3. Materiality... 4. Accounting con…
13 terms
Principles of Accounting Chapter 6
Operating profit
Profit for the year
Retained profit
Shareholders' equity
Profit arrived at after all operating expenses have been char…
Profit that a company made after taxation. Can be used to pay…
Profit that remains once taxation and dividends have been ded…
Share capital and reserves of the company. Main reserve is co…
Operating profit
Profit arrived at after all operating expenses have been char…
Profit for the year
Profit that a company made after taxation. Can be used to pay…
27 terms
Chapter 6: Principles of Accounting
FIFO
LIFO
Weighted average (average cost)
Specific identification (specific invo…
Assumes costs flow in the order incurred
Assumes costs flow in the reverse order incurred
Assumes costs flow at an average of the costs available
Used to assign costs
FIFO
Assumes costs flow in the order incurred
LIFO
Assumes costs flow in the reverse order incurred
25 terms
Principles of Accounting Chapter 6
Source Document
Accounting Cycle
Journal
Journalizing
A business paper that verifies that a transaction actually oc…
A sequence of business activities completed throughout a fisc…
A chronological record of business transactions
The process of recording business transactions in a journal
Source Document
A business paper that verifies that a transaction actually oc…
Accounting Cycle
A sequence of business activities completed throughout a fisc…
19 terms
Principles of Accounting I Chapter 6
Operating Cycle
Fees Earned
Net Income
Sales
the Process by which a company spends cash, generated revenue…
The revenue activities of a service business involve providin…
The operating expenses incurred in providing the services are…
How revenue is reported when merchandise is sold.
Operating Cycle
the Process by which a company spends cash, generated revenue…
Fees Earned
The revenue activities of a service business involve providin…
30 terms
Principles of Accounting 1 - Chapter 6 - Vocabulary Terms
operating cycle
sales
cost of merchandise sold
gross profit
The process by which a company spends cash, generates revenue…
The total amount charged customers for merchandise sold, incl…
The cost that is reported as an expense when merchandise is s…
Sales minus the cost of merchandise sold.
operating cycle
The process by which a company spends cash, generates revenue…
sales
The total amount charged customers for merchandise sold, incl…
16 terms
Principles Of Accounting 1: Chapter 6
Accounting Principles Associated with…
Consistency Principle
Disclosure Principle
Materiality Concept
Consistency, Disclosure, Materiality, Accounting Conservatism
A business should use the same accounting methods and procedu…
A company should report enough information for outsiders to m…
A company must perform strictly proper accounting only for si…
Accounting Principles Associated with…
Consistency, Disclosure, Materiality, Accounting Conservatism
Consistency Principle
A business should use the same accounting methods and procedu…
11 terms
Principles of Accounting I, Chapter 6
control of inventory
ways to protect inventory from theft
make sure financial statements are cor…
3 inventory cost flow assumptions
to safeguard your assets and make sure financial statements a…
mirrors, locks, alarms, tags
count inventory and use perpetual inventory systems
FIFO, LIFO, Average Cost
control of inventory
to safeguard your assets and make sure financial statements a…
ways to protect inventory from theft
mirrors, locks, alarms, tags
27 terms
Principles of Accounting 1 - Chapter 6: Accounting for Merchandising Businesses
Operating cycle
Gross profit =
Net income =
Merchandising inventory
The process by which a company spends cash, generates revenue…
Sales - cost of merch sold
Gross profit - operating expenses
Merchandise not sold at the end of the accounting period
Operating cycle
The process by which a company spends cash, generates revenue…
Gross profit =
Sales - cost of merch sold
11 terms
Accounting Principles Chapter 6 (Section 6.1: The Accounting Cycle)
Accounting Cycle
Source Document
Invoice
Receipt
The accounting period of a business separated into activities.
A document, such as paper, that is prepared as evidence of a…
A source document that lists specific information about a bus…
A source document that is a record of cash received by a busi…
Accounting Cycle
The accounting period of a business separated into activities.
Source Document
A document, such as paper, that is prepared as evidence of a…
24 terms
Principles of Accounting 1 Chapter 6 Key Terms
Administrative Expenses
Cost of Merchandise Purchased
Cost of Merchandise Sold
Credit memorandum
Also known as general or operating expenses. These are genera…
The dollar amount of what you bought for resale. Add purchase…
This is the cost of the merchandise that you actually sold to…
Where the seller sends permission to the customer to return s…
Administrative Expenses
Also known as general or operating expenses. These are genera…
Cost of Merchandise Purchased
The dollar amount of what you bought for resale. Add purchase…
42 terms
Chapter 6 Vocab Principles of Financial Accounting
accounting controls
administrative controls
adverse opinion
audits
procedures companies implement to safeguard assets and to ens…
procedures companies implement to evaluate performance and mo…
opinion issued by a certified public accountant that means on…
detailed examination of some aspect of a company's accounting…
accounting controls
procedures companies implement to safeguard assets and to ens…
administrative controls
procedures companies implement to evaluate performance and mo…
20 terms
Principles of Financial Accounting Chapter 6 Vocabulary
Revenue Realization Principle
When to record Revenue
FOB (Free on Board) Shipping Point
FOB Destination
Principle that requires revenues to be recorded when they are…
F: Fixed Price... A: Arrangement for exchange... C: Collection reas…
Title changes hands at shipment, and the buyer normally pays…
Title changes hands on delivery, and the seller normally pays…
Revenue Realization Principle
Principle that requires revenues to be recorded when they are…
When to record Revenue
F: Fixed Price... A: Arrangement for exchange... C: Collection reas…
23 terms
Principles of Accounting Test #2 (Chapter 6)
merchandising business
cash gap
financing period
perpetual inventory system
earns income by buying and selling goods, whiter called merch…
the period between the time the suppliers must be paid and th…
the amount of time from the purchasing of inventory until it…
continuous records are kept pf the quantity and , usually, th…
merchandising business
earns income by buying and selling goods, whiter called merch…
cash gap
the period between the time the suppliers must be paid and th…
13 terms
Accounting Chapter 6 Concepts/Principles/Methods
Consistency Principle
Disclosure Principle
Materiality Concept
Conservatism
A business should use the same accounting methods and procedu…
A business's financial statements must report enough informat…
A company must perform strictly proper accounting (follows GA…
-A business should report the least favorable figures in the…
Consistency Principle
A business should use the same accounting methods and procedu…
Disclosure Principle
A business's financial statements must report enough informat…
21 terms
ACCT 209 Principles Of Accounting: Chapter 6
Sales
Cost of Merchandise Sold
Gross Profit
Merchandise Inventory
When merchandise is sold and its cost is recognized as an exp…
The expense of a sales cost. The cost of merchandise sold is…
It is the profit before deducting operating expenses.
Merchandise on hand (not sold) at the end of an accounting pe…
Sales
When merchandise is sold and its cost is recognized as an exp…
Cost of Merchandise Sold
The expense of a sales cost. The cost of merchandise sold is…
16 terms
Barrette ~ Fundamental Accounting Principles Chapter 6
average cost
conservatism constraint
consignee
consignor
See weighted average.
Principle that prescribes the less optimistic ... estimate when…
Receiver of goods owned by another who holds them for ... purpos…
Owner of goods who ships them to another party who will ... sell…
average cost
See weighted average.
conservatism constraint
Principle that prescribes the less optimistic ... estimate when…
22 terms
Accounting Chapter 6 Review
Accounting Cycle
Source Document
Invoice
Receipt
The accounting period of a business is separated into activit…
Evidence of business transactions.
Describes the buying or selling of an item on account. Normal…
A record of cash received by a business. It indicates the dat…
Accounting Cycle
The accounting period of a business is separated into activit…
Source Document
Evidence of business transactions.
17 terms
Principles of Accounting I -- Chapter 6 -- Merchandising Activities -- Vocabulary
Comparable Store Sales
Contra-Revenue Account
Control Account
Cost of Goods Sold
A comparison of sales figures at established stores with exis…
A debit balance account that is offset against revenue in the…
A general ledger account that summarizes the content of a spe…
The cost to a merchandising company of the goods it has sold…
Comparable Store Sales
A comparison of sales figures at established stores with exis…
Contra-Revenue Account
A debit balance account that is offset against revenue in the…
REA CLEP Principles of Financial Accounting Vocabulary: Chapter 6
Closing
Contra Accounts
Credit
Debit
End-of-year posting to bring the temporary accounts to zero a…
Sister accounts that have a normal balance the opposite of th…
The right side of T-accounts. Credits increase liabilities an…
The left side of T-accounts. Debits increase assets, withdraw…
Closing
End-of-year posting to bring the temporary accounts to zero a…
Contra Accounts
Sister accounts that have a normal balance the opposite of th…
25 terms
Chapter 6 Vocabulary (BUS 201: Principles of Accounting I)
Average Days In Inventory
Cost of Goods Sold (COGS)
Finished Goods
First-In, First-Out Method (FIFO)
Approximate number of days the average inventory is held. It…
Cost of the inventory that was sold during the period.
Inventory items for which the manufacturing process is comple…
Inventory costing method that assumes the first units purchas…
Average Days In Inventory
Approximate number of days the average inventory is held. It…
Cost of Goods Sold (COGS)
Cost of the inventory that was sold during the period.
22 terms
Accounting Chapter 6 Review
Accounting Cycle
Source Document
Invoice
Receipt
The accounting period of a business is separated into activit…
Evidence of business transactions.
Describes the buying or selling of an item on account. Normal…
A record of cash received by a business. It indicates the dat…
Accounting Cycle
The accounting period of a business is separated into activit…
Source Document
Evidence of business transactions.
8 terms
accounting chapter 6 vocab
adjustments
balance sheet
fiscal period
income statement
changes recorded on a work sheet to update general ledger acc…
a financial statement that reports assets, liabilities, and o…
the length of time for which a business summarizes and report…
a financial statement showing the revenue and expenses for a…
adjustments
changes recorded on a work sheet to update general ledger acc…
balance sheet
a financial statement that reports assets, liabilities, and o…
8 terms
Accounting Chapter 6
Work Sheet
Adjustments
Fiscal Period
Net Loss
A columnar accounting form used to summarize the general ledg…
Changes recorded on a worksheet to update general ledger acco…
The length of time for which a business summarizes and report…
The difference between total revenue and total expenses when…
Work Sheet
A columnar accounting form used to summarize the general ledg…
Adjustments
Changes recorded on a worksheet to update general ledger acco…
21 terms
Accounting Chapter 6 Review
Accounting Cycle
Source Document
Invoice
Receipt
A series of business activities.
Evidence of business transactions.
Describes the buying or selling of an item on account. Normal…
A record of cash received by a business. It indicates the dat…
Accounting Cycle
A series of business activities.
Source Document
Evidence of business transactions.
24 terms
Principles of Accounting 1, Chapter 6 Practice Test
Analysis
Analysis, design, implementation
Information needs
Accounts receivable ledger
The phase of accounting system installation in which the info…
The three phases of setting up an accounting system are, in o…
The goal of systems analysis is to determine
The individual accounts with customers are included in a subs…
Analysis
The phase of accounting system installation in which the info…
Analysis, design, implementation
The three phases of setting up an accounting system are, in o…
8 terms
Accounting Chapter 6 Vocabulary
adjustments
balance sheet
fiscal period
income statement
changes recorded on a work sheet to update general ledger acc…
a financial statement that reports assets, liabilities, and o…
the length of time for which a business summarizes and report…
a financial statement showing the revenue and expenses for a…
adjustments
changes recorded on a work sheet to update general ledger acc…
balance sheet
a financial statement that reports assets, liabilities, and o…
94 terms
Principles of Accounting Chapter 2
Account
T Account
Debit (Dr.)
Credit (Cr.)
is an individual accounting record of increases and decreases…
In its simplest form, an account consists of three parts: (1)…
Left
Right
Account
is an individual accounting record of increases and decreases…
T Account
In its simplest form, an account consists of three parts: (1)…
15 terms
Glencoe Accounting Chapter 6
Accounting cycle
Source document
Invoice
Receipt
Collect and verify source documents, analyze each transaction…
When a business transaction occurs, this paper is prepared as…
Lists specific information about a business transaction invol…
A record of cash received by a business.
Accounting cycle
Collect and verify source documents, analyze each transaction…
Source document
When a business transaction occurs, this paper is prepared as…
8 terms
Accounting Chapter 6
adjustments
balance sheet
fiscal period
income statement
Changes recorded on a work sheet to update general ledger acc…
A financial statement that reports assets, liabilities, and o…
The length of time for which a business summarizes and report…
A financial statement showing the revenue and expenses for a…
adjustments
Changes recorded on a work sheet to update general ledger acc…
balance sheet
A financial statement that reports assets, liabilities, and o…
Principles of Accounting Chapter 1
Accounting
Assets
Balance sheet
Basic accounting equation
The information system that identifies, records, and communic…
Resources a business owns.
A financial statement that reports the assets, liabilities, a…
Assets = Liabilities + Owner's Equity
Accounting
The information system that identifies, records, and communic…
Assets
Resources a business owns.
14 terms
Accounting Chapter 6
Fiscal period
Net income
Cash basis of accounting
Accounting period
The length of time for which a business summarizes its financ…
The difference between total revenue and total expenses when…
Reporting income when the cash is received and expenses when…
Another name for a fiscal period.
Fiscal period
The length of time for which a business summarizes its financ…
Net income
The difference between total revenue and total expenses when…
47 terms
Accounting Chapter 6
Adjustments
Balance Sheet
Fiscal Period
Income Statement
The length of time for which a business summarizes and report…
A columnar accounting form used to summarize the general ledg…
A proof of equality of debits and credits in a general ledger.
Changes recorded on a work sheet to update general ledger acc…
Adjustments
The length of time for which a business summarizes and report…
Balance Sheet
A columnar accounting form used to summarize the general ledg…
11 terms
Chapter 6 Quiz -Merchandise Inventory-Accounting Principles and Controls
Specific Identification Method
FIFO
LIFO
Weighted Average Method
This costing method is best for businesses that sell unique,…
A method where the cost of goods sold is based on the oldest…
A method opposite of FIFO, Last-in, First Out. the cost of go…
This costing method is based on the weighted average cost per…
Specific Identification Method
This costing method is best for businesses that sell unique,…
FIFO
A method where the cost of goods sold is based on the oldest…
22 terms
Principles of Accounting Chapter 3
Accrual-basis accounting
Accruals
Accrued expenses
Accrued revenues
Accounting basis in which companies record transactions that…
Adjusting entries for either accrued revenues or accrued expe…
Expenses incurred but not yet paid in cash or recorded.
Revenues for services performed but not yet received in cash…
Accrual-basis accounting
Accounting basis in which companies record transactions that…
Accruals
Adjusting entries for either accrued revenues or accrued expe…
17 terms
Accounting: chapter 6
account form of balance sheet
accounting cycle
classified balance sheet
closing process
A balance sheet in which the assets are on the left and the l…
The steps involved in accounting for all of the business acti…
A balance sheet with separate categories for current assets;…
The process of giving zero balances to the temporary accounts…
account form of balance sheet
A balance sheet in which the assets are on the left and the l…
accounting cycle
The steps involved in accounting for all of the business acti…
Principles of Accounting Chapter 15
Bond certificate
Bond indenture
Bonds
Callable bonds
A legal document that indicates the name of the issuer, the f…
A legal document that sets forth the terms of the bond issue.
A form of interest-bearing notes payable issued by corporatio…
Bonds that are subject to redemption (buy back) at a stated d…
Bond certificate
A legal document that indicates the name of the issuer, the f…
Bond indenture
A legal document that sets forth the terms of the bond issue.
8 terms
Accounting I - Chapter 6
adjustments
balance sheet
fiscal period
income statement
changes recorded on a work sheet to update general ledger acc…
a financial statement that reports assets, liabilities, and o…
the length of time for which a business summarizes and report…
a financial statement showing the revenue and expenses for a…
adjustments
changes recorded on a work sheet to update general ledger acc…
balance sheet
a financial statement that reports assets, liabilities, and o…
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