Accounting Chapter 5

Source Document – A business paper from which information is obtained for a journal entry
ACCOUNTS RECEIVABLE, EDGAR & CINTIA'S ANTIQUE STORE – ASSET
When the variable cost per unit decreases and the selling price per unit and other costs remain the same, the number of units that must be sold to break-even:
a.
Decreases.
b.
Stays the same.
c.
Increases.
d.
The answer cannot be determined from the above information. – a.
Decreases.
creditor – a person or business to whom a liability is owed
Under a periodic system, the company uses separate accounts to record freight costs, returns, and discounts.
A. True
B. False – TRUE
​Providing Cash – Determining that the amount of cash agrees with the accounting records
Balance sheet – Snapshots of company's assets and liabilities / shows accumulated earnings or loses
Single step income statement – An income statement that shows only one step in determining net income
proprietorship – generally owned by one person, simple to establish, owner controlled, tax advantages
Owner investment – Resources such as cash or other assets that an owner invests into
Identify the Structure at “2” 
Principles & Assumptions of Accounting 1: Measurement/cost principle – accounting information is based on actual cost
Which of the following types effects would NOT be possible when a company records a transaction?
a. increase in an asset and increase in an expense
b. increase in one asset and decrease in another asset
c. increase in an asset and increase in a liability
d. decrease in an asset and increase in an expense
e. Increase in a liability and increase in an expense – a. increase in an asset and increase in an expense
Liability corp. – Owned by a few stockholders
Checking Account – A bank account from which payments can be ordered by a despositor
purchase allowance – is a reduction in the cost of defective or unacceptable merchandise that a buyer acquires
Standard costing is extremely useful when unique, high cost products are produced, as compared to the production of multiple products. – False
Identify the Structure аt “2” 
Partnership – a business owned by two or more persons associated as partners
source document – business paper from which info is obtained for a journal entry

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