Accounting Vocabulary Chps 1 3

Accounts payable – Current liability
wage – payment for work, usually figured by the hour
Supplies. – A type of asset that will be consumed as it is used (Examples: embalming supplies and office supplies).
current liabilities – Obligations the company is to pay within the coming year.
Usually list notes payable first, followed by accounts payable.
4 Finacial Statements – Income Statement. Statements of Retained Earnings. Balance Sheet. Statement of Cash Flows
net income – the amount by which revenues exceed expenses
Special Endorsement – endorsement indicating a new owner of a check
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Direct Materials (DM) – can be physically and conveniently traced to individual units of the finished product (variable costs)
a creditor – has financial claims have to equal the total cost of the property.
"Days of Sales Outstanding?" Classify, Calculate, and Interpret. – Activity Ratio

Days of Sales Outstanding = [ 365 / receivables turnover ]

Close to industry norm; too HIGH, customers too slow to pay bills; too LOW, firm's credit policy is strict – may hamper sales

Leasehold improvements – Alterations or improvements to leased property such as partitions and storefronts.
causas de las variaciones del efectivo cuenta – causes of changes in funds account
Faithful Representation – information that is not biased
Inventory – The merchandise that a business keeps on hand for sale is the
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DuPont Model
(Net Income / Sales) x (Sales/Avg total Assets) – = ROI
balance ledger form – balance due of that account will always appear

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