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Study sets matching "financial accounting chapter 7"

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Study sets matching "financial accounting chapter 7"

92 terms
Financial Accounting Chapter 7
Accelerated depreciation method
Accumulated depreciation
Activity-based method
Addition
Allocates a higher depreciation in the earlier years of the a…
A contra asset account representing the total depreciation ta…
Allocates an asset's cost based on its use
Occurs when a new major component is added to an existing asset
Accelerated depreciation method
Allocates a higher depreciation in the earlier years of the a…
Accumulated depreciation
A contra asset account representing the total depreciation ta…
7 terms
Financial Accounting Chapter 7
Days to Sell
First-In, First-Out (FIFO)
Inventory Turnover
Last-In, First-Out (LIFO)
Measure of the average number of days from the time inventory…
Assumes that the first goods purchased (the first in) are the…
The process of buying and selling inventory.
Assumes that the most recently purchased units (the last in)…
Days to Sell
Measure of the average number of days from the time inventory…
First-In, First-Out (FIFO)
Assumes that the first goods purchased (the first in) are the…
92 terms
Financial Accounting- Chapter 7
Accelerated depreciation method
Accumulated depreciation
Activity-based method
Addition
Allocates a higher depreciation in the earlier years of the a…
A contra asset account representing the total depreciation ta…
Allocates an asset's cost based on its use
Occurs when a new major component is added to an existing asset
Accelerated depreciation method
Allocates a higher depreciation in the earlier years of the a…
Accumulated depreciation
A contra asset account representing the total depreciation ta…
25 terms
Financial Accounting Chapter 7
average cost method
cost of goods sold equation
direct labor
factory overhead
uses the weighted average unit cost of the goods available fo…
BI + P - EI = CGS
earnings of employees who work directly on products being man…
manufacturing costs that are not raw material or direct labor…
average cost method
uses the weighted average unit cost of the goods available fo…
cost of goods sold equation
BI + P - EI = CGS
8 terms
Financial Accounting Chapter 7
Days to Sell
First-In, First-Out (FIFO)
Inventory Turnover
Last-In, First-Out (LIFO)
Measure of the average number of days from the time inventory…
Assumes that the first goods purchased (the first in) are the…
The process of buying and selling inventory.
Assumes that the most recently purchased units (the last in)…
Days to Sell
Measure of the average number of days from the time inventory…
First-In, First-Out (FIFO)
Assumes that the first goods purchased (the first in) are the…
92 terms
Financial Accounting Chapter 7
Accelerated depreciation method
Accumulated depreciation
Activity-based method
Addition
Allocates a higher depreciation in the earlier years of the a…
A contra asset account representing the total depreciation ta…
Allocates an asset's cost based on its use
Occurs when a new major component is added to an existing asset
Accelerated depreciation method
Allocates a higher depreciation in the earlier years of the a…
Accumulated depreciation
A contra asset account representing the total depreciation ta…
28 terms
Financial Accounting Chapter 7
Accumulated Depreciation
Amortization
Average Age of Fixed Assets
Book Value
The total amount of depreciation expense that has been record…
The process whereby companies systematically allocate the cos…
A rough estimate of the age of fixed assets that can be compu…
The value of an asset or a liability as it appears on the bal…
Accumulated Depreciation
The total amount of depreciation expense that has been record…
Amortization
The process whereby companies systematically allocate the cos…
30 terms
Financial Accounting Chapter 7 Terms
Accounts Receivable
Accounts Receivable Aging Method
Aging of Accounts Receivable
Allowance for Uncollectible Accounts
Short term financial assets that arise from sales on credit a…
A method of estimating Uncollectible Accounts based on the as…
The process of listing each customer's receivable account acc…
A contra asset account that reduces accounts receivable to th…
Accounts Receivable
Short term financial assets that arise from sales on credit a…
Accounts Receivable Aging Method
A method of estimating Uncollectible Accounts based on the as…
92 terms
Financial Accounting Chapter 7
Accelerated depreciation method
Accumulated depreciation
Activity-based method
Addition
Allocates a higher depreciation in the earlier years of the a…
A contra asset account representing the total depreciation ta…
Allocates an asset's cost based on its use
Occurs when a new major component is added to an existing asset
Accelerated depreciation method
Allocates a higher depreciation in the earlier years of the a…
Accumulated depreciation
A contra asset account representing the total depreciation ta…
20 terms
Financial Accounting Chapter 7
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.
18 terms
Chapter 7 - Libby, Libby & Short - Financial Accounting
Coleman Company has provided the follo…
Which of the following costs would not…
Which of the following statements is i…
Laurer Corporation uses the periodic i…
In this problem, you have to work backwards but the formula t…
Any costs to delivery inventory to our company, costs of insp…
Manufacturing companies have three inventory accounts: Raw ma…
First we have to calculate the total cost of beginning invent…
Coleman Company has provided the follo…
In this problem, you have to work backwards but the formula t…
Which of the following costs would not…
Any costs to delivery inventory to our company, costs of insp…
26 terms
Chapter 7: Fundamental Financial Accounting Concepts
Accounts Receivable Turnover Ratio
Accrued Interest
Adjusting Entry
Aging of Accounts Receivable
Financial Ratio that measures how fast accounts receivable ar…
Interest revenue or expense that is recognized before cash ha…
Entry that updates account balances prior to preparing financ…
Classifying each account receivable by the number of days it…
Accounts Receivable Turnover Ratio
Financial Ratio that measures how fast accounts receivable ar…
Accrued Interest
Interest revenue or expense that is recognized before cash ha…
20 terms
Financial Accounting Chapter 7
Bank Reconciliation
Bank Statement
Bonding
Cash
The process of comparing the bank's account balance, and expl…
A statement received monthly from the bank that shows the dep…
Obtaining insurance protection against theft by employees
Resources that consist of coins, currency, checks, money orde…
Bank Reconciliation
The process of comparing the bank's account balance, and expl…
Bank Statement
A statement received monthly from the bank that shows the dep…
9 terms
FINANCIAL ACCOUNTING: Chapter 7
Accrued Expenses
Liabilities
Current Liabilities
Current Liabilities Include:
The term _____________ is often used on the balance sheet to…
Obligations that represent "probable future sacrifice of econ…
Those liabilities that will be paid within one year of the cu…
-Accounts Payable... -Short-term Debt (Notes Payable)... -Current M…
Accrued Expenses
The term _____________ is often used on the balance sheet to…
Liabilities
Obligations that represent "probable future sacrifice of econ…
20 terms
Financial Accounting: Chapter 7
Bank Reconciliation
Bank Service Charge
Bank Statement
Bonding
The process of comparing the banks balance of an account with…
A fee charged by a bank for the use of its services.
A monthly statement from the bank that shows a depositor's ba…
Obtaining insurance protection against misappropriation of as…
Bank Reconciliation
The process of comparing the banks balance of an account with…
Bank Service Charge
A fee charged by a bank for the use of its services.
53 terms
Financial Accounting Chapter 7
Tangible assets
Intangible assets.
How to properly report both tangible a…
Acquistions
property, plant, and equipment; plant assets; or fixed assets…
Assets in this category include patents, trademarks, copyrigh…
1.) which amounts to include in their cost... 2.) how to expense…
first issue in accounting for long-term assets: how to identi…
Tangible assets
property, plant, and equipment; plant assets; or fixed assets…
Intangible assets.
Assets in this category include patents, trademarks, copyrigh…
18 terms
Financial Accounting Chapter 7
consignment
goods in transit
FOB (free on board) shipping point
FOB (free on board) destination
when a consignor (the owner) transfers inventory to a consign…
when there are items that are not in the hands of either the…
indicates that the seller is responsible for the goods only t…
indicates that the seller is responsible for the goods all th…
consignment
when a consignor (the owner) transfers inventory to a consign…
goods in transit
when there are items that are not in the hands of either the…
29 terms
Financial Accounting Chapter 7
Average Cost Method
Cost of Goods Sold Equation
Direct Labor
Factory Overhead
Method that uses the weighted average unit cost of the goods…
Beginning Inventory + Purchases - Ending Inventory
The earnings of employees who work directly on the products b…
Other Manufacturing costs that are not raw material or direct…
Average Cost Method
Method that uses the weighted average unit cost of the goods…
Cost of Goods Sold Equation
Beginning Inventory + Purchases - Ending Inventory
10 terms
Financial Accounting Chapter 7
Work in Process Inventory
Merchandise Inventory
Consignment Inventory
Specific Identification
which includes goods that are in the process of being manufac…
consists of products acquired in a finished condition, ready…
goods a company is holding on behalf of the goods' owner (whe…
the inventory costing method that identifies the cost of the…
Work in Process Inventory
which includes goods that are in the process of being manufac…
Merchandise Inventory
consists of products acquired in a finished condition, ready…
10 terms
Financial Accounting Chapter 7
A firm that sells goods that it purcha…
The Sales Returns and Allowances accou…
At the end of the month, after the equ…
Detailed information about the transac…
B
D
A
D
A firm that sells goods that it purcha…
B
The Sales Returns and Allowances accou…
D
22 terms
Financial Accounting Chapter 7
Average Cost Method
Cost of Goods Sold Equation
Direct Labor
Factory Overhead
The weighted average unit cost of the goods available for sal…
BI + P - EI = CGS
Refers to the earnings of employees who work directly on the…
Manufacturing costs that are not raw material or direct labor…
Average Cost Method
The weighted average unit cost of the goods available for sal…
Cost of Goods Sold Equation
BI + P - EI = CGS
16 terms
Financial Accounting Chapter 7
Inventory
Perpetual Inventory System
Periodic Inventory System
Specific Identification Method
A tangible resource that is held for resale in the normal cou…
A recording system that updates the inventory account each ti…
A recording system that updates the inventory account only at…
Inventory costing method that determines cost of goods sold b…
Inventory
A tangible resource that is held for resale in the normal cou…
Perpetual Inventory System
A recording system that updates the inventory account each ti…
24 terms
Financial Accounting Chapter 7
What are the primary goals of inventor…
Consequence of low-quality items?
Low quantity with high demand?
High quantity with low demand?
1. have sufficient quantities of high-quality inventory avail…
customer dissatisfaction, returns, and a decline in future sa…
lost sales revenue and decreases in customer satisfaction
increases storage costs as well as interest costs on short-te…
What are the primary goals of inventor…
1. have sufficient quantities of high-quality inventory avail…
Consequence of low-quality items?
customer dissatisfaction, returns, and a decline in future sa…
16 terms
Financial Accounting Chapter 7
accounts receivable
accounts receivable turnover
aging of accounts receivable
allowance for doubtful accounts/ allow…
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 uncollectab…
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…
19 terms
Financial Accounting Chapter 7
inventory
merchandise inventory
raw materials inventory
work in process inventory
tangible property held for sale in the normal course of busin…
includes goods held for resale in ordinary course of business
includes items acquired for the purpose of processing into fi…
include goods in the process of being manufactured
inventory
tangible property held for sale in the normal course of busin…
merchandise inventory
includes goods held for resale in ordinary course of business
35 terms
Chapter 7 - Financial Accounting
Financial Accounting is designed to co…
In general, these reports(FA) are prim…
Standard Financial Accountin reports i…
Target Audience for internal and exter…
transactional data
external parties.
Balance Sheet... Income Statement... Statement of Cash Flows
Internal... Executives... Senior Management... Administrative Staff... Em…
Financial Accounting is designed to co…
transactional data
In general, these reports(FA) are prim…
external parties.
22 terms
Financial Accounting Chapter 7
Accelerated Depreciation Methods
Amortization
Capital Expenditures
Copyright
A depreciation method that writes off a relatively larger amo…
The systematic reduction of a lump-sum amount. Expense that a…
Expenditure that increases an asset's capacity or extends its…
Exclusive right to reproduce and sell a book, musical composi…
Accelerated Depreciation Methods
A depreciation method that writes off a relatively larger amo…
Amortization
The systematic reduction of a lump-sum amount. Expense that a…
34 terms
Financial Accounting Chapter 7
Inventory is considered?
Merchandising Inventory
Manufacturing Inventory (3)
components of WIP and finished goods (3)
A current asset because a company normally sells it within a…
Includes all goods owned and held for sale in the regular cou…
Raw materials (goods used in making products), work in proces…
Cost of the raw materials, cost of the labor, overhead costs…
Inventory is considered?
A current asset because a company normally sells it within a…
Merchandising Inventory
Includes all goods owned and held for sale in the regular cou…
20 terms
Financial Accounting Chapter 7
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
21 terms
Financial Accounting Chapter 7
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
33 terms
Financial Accounting: Chapter 7
Fraud
The Fraud Triangle
The Sarbanes-Oxley Act of 2002 (SOX)
Internal Control
dishonest act by an employee which results in personal benefi…
1. Opportunity... 2. Financial pressure... 3. Rationalization
1. Imposes more responsibility on executives and board of dir…
Methods and measures adopted by a business to safeguard its a…
Fraud
dishonest act by an employee which results in personal benefi…
The Fraud Triangle
1. Opportunity... 2. Financial pressure... 3. Rationalization
23 terms
financial accounting: chapter 7
inventory
merchandise inventory
raw materials inventory
work in progress inventory
tangible property held for sale in the normal course of busin…
includes goods held for resale in the ordinary course of busi…
includes items acquired for the purpose of processing into fi…
includes goods in the process of being manufactured
inventory
tangible property held for sale in the normal course of busin…
merchandise inventory
includes goods held for resale in the ordinary course of busi…
44 terms
Financial Accounting (Chapter 7-9)
Fraud
Sarbanes-Oxley Act (SOX)
Public Company Accounting Oversight Bo…
Internal Control
- Dishonest act by an employee that results in personal benef…
- All publicly traded U.S. corporations are required to maint…
It was created by SOX to establish auditing standards and reg…
- It consists of all the related methods and measures adopted…
Fraud
- Dishonest act by an employee that results in personal benef…
Sarbanes-Oxley Act (SOX)
- All publicly traded U.S. corporations are required to maint…
Chapter 7 Financial Accounting
What is the Public Company Accounting…
What are the 5 primary components of I…
What are the 6 principles of Control A…
Explain 'Establishment of Responsibili…
A board created by SOX that establishes auditing standards an…
- A control environment... - Risk Assessment... - Control Activitie…
- Establishment of responsibility... - Segregation of duties... - D…
Control is most effective when only one person is responsible…
What is the Public Company Accounting…
A board created by SOX that establishes auditing standards an…
What are the 5 primary components of I…
- A control environment... - Risk Assessment... - Control Activitie…
25 terms
Financial Accounting Chapter 7
accelerated depreciation method
accumulated depreciation
activity-based method
amortization
Allocates a higher depreciation in the earlier years of the a…
A contra asset account representing the total depreciation ta…
Allocates an asset's cost based on its use
Allocating the cost of an intangible asset over its service l…
accelerated depreciation method
Allocates a higher depreciation in the earlier years of the a…
accumulated depreciation
A contra asset account representing the total depreciation ta…
31 terms
Financial Accounting Chapter 7 Terms
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
Financial Accounting Chapter 7 Terms
Accounts Receivable Turnover Rate
Aging The Accounts Receivable
Allowance for Doubtful Accounts
Bank Reconciliation
A ratio used to measure the liquidity of accounts receivable…
The process of classifying accounts receivable by age groups…
A valuation account or contra-asset account relating to accou…
An analysis that explains explains the difference between the…
Accounts Receivable Turnover Rate
A ratio used to measure the liquidity of accounts receivable…
Aging The Accounts Receivable
The process of classifying accounts receivable by age groups…
25 terms
Chapter 7 Financial Accounting
Financial Reports
Accounting Period
Accounting Cycle
Claim *
Written records that summarize the results of financial trans…
A block of time covered by an accounting period
The activities or steps that help a business keep its account…
Legal right *
Financial Reports
Written records that summarize the results of financial trans…
Accounting Period
A block of time covered by an accounting period
26 terms
Financial Accounting Chapter 7
Fraud:
3 Factors that contribute to fraud:
The Sarbanes-Oxley Act:
Internal Control Methods and measures…
dishonest act by an employee that results in a personal benef…
opportunity, financial pressure, rationalization
supposed to provide stockholders with more assurance that the…
safeguard assets, increase accuracy of accounting records, in…
Fraud:
dishonest act by an employee that results in a personal benef…
3 Factors that contribute to fraud:
opportunity, financial pressure, rationalization
20 terms
Financial Accounting Chapter 7
Bank reconcilliation
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 reconcilliation
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.
16 terms
Financial & Managerial Accounting Chapter 7
bank reconciliation
bank statement
cash
cash equivalents
The analysis that details the items responsible for the diffe…
A summary of all transactions mailed to the depositor or made…
Coins, currency (paper money), checks, money orders, and mone…
Highly liquid investments that are usually reported with cash…
bank reconciliation
The analysis that details the items responsible for the diffe…
bank statement
A summary of all transactions mailed to the depositor or made…
Chapter 7 Financial Accounting
Internal control
5 primary components of internal control
Limitations of internal control
Cash equivalents
Safeguard assets, enhance accuracy and reliability of records…
Control environment, risk assessment, control activities, inf…
Costs should not exceed benefit, human element, and size of t…
Short term, highly liquid investments that are both readily c…
Internal control
Safeguard assets, enhance accuracy and reliability of records…
5 primary components of internal control
Control environment, risk assessment, control activities, inf…
15 terms
Financial Accounting Chapter 7 Vocabulary
Accounts Receivable
Bad debts
Expense Recognition (matching) Principle
Materiality constraint
Amounts due from customers for credit sales; backed by the cu…
Accounts of customers who do not pay what they have promised…
Prescribes expenses to be reported in the same as the revenue…
Prescribes that accounting for items that significantly impac…
Accounts Receivable
Amounts due from customers for credit sales; backed by the cu…
Bad debts
Accounts of customers who do not pay what they have promised…
17 terms
financial accounting chapter 7
bank reconciliation
bank statement
cash
cash equivalents
the analysis that details the items responsible for the diffe…
a summary of all transactions mailed to the depositor or made…
coins, currency, checks, money orders, and money on deposit t…
highly liquid investments that are usually reported with cash…
bank reconciliation
the analysis that details the items responsible for the diffe…
bank statement
a summary of all transactions mailed to the depositor or made…
23 terms
financial accounting chapter 7
lump sum purchase of assets
capital expenditure
capitalized
cost-accumulated depreciation
purchase of several assets for a single lump sum amount (ex b…
increase the assets capacity or extend useful life
cost is added to asset account rather than being expensed imm…
book value=
lump sum purchase of assets
purchase of several assets for a single lump sum amount (ex b…
capital expenditure
increase the assets capacity or extend useful life
Financial accounting chapter 7
Specific identification
First-in, first-out (FIFO):
Last-in, first-out (LIFO)
Periodic updating
The inventory costing method that identifies the cost of the…
Assumes that the costs of the first goods purchased (first in…
Assumes that the costs of the last goods purchased (last in)…
BI + P - EI = COG
Specific identification
The inventory costing method that identifies the cost of the…
First-in, first-out (FIFO):
Assumes that the costs of the first goods purchased (first in…
20 terms
Financial Accounting Chapter 7
Primary goals of inventory managers
Merchandise inventory
Three types of inventory manufacturers…
Consignment inventory
1) maintain a sufficient quantity of inventory to meet custom…
consists of products acquired in a finished condition, ready…
1. Raw Materials Inventory... 2. Work in Process Inventory... 3. Fi…
-refers to goods a company is holding on behalf of the goods'…
Primary goals of inventory managers
1) maintain a sufficient quantity of inventory to meet custom…
Merchandise inventory
consists of products acquired in a finished condition, ready…
12 terms
Financial Accounting Chapter 7
Cost of an Asset
cost includes
Cost of land includes
cost of constructing a building includes
is the sum of all the costs incurred to bring the asset to it…
purchase price, taxes, commissions, and other amounts paid to…
purchase price + note payable, brokerage commission, survey f…
architectural fees, building permits, contractors' charges, p…
Cost of an Asset
is the sum of all the costs incurred to bring the asset to it…
cost includes
purchase price, taxes, commissions, and other amounts paid to…
23 terms
Financial Accounting Chapter 7
Bad debt
Purchase order
Receiving report
Controller
An accounting receivable that is unable to be collected; also…
A document showing details of merchandise being ordered from…
A document evidencing the receipt of goods purchased.
The individual in an organization responsible for the account…
Bad debt
An accounting receivable that is unable to be collected; also…
Purchase order
A document showing details of merchandise being ordered from…
10 terms
Financial accounting chapter 7
Money
Cash
Examples of cash
Postdated checks
Standard medium of exchange in business transactions
Money and any other negotiable instrument that is payable in…
Checks,bank drafts and money orders
Cant be considered as cash yet because these checks are unacc…
Money
Standard medium of exchange in business transactions
Cash
Money and any other negotiable instrument that is payable in…
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