Leaving Cert Accounting Ratios

Net purchases – purchases minus purchases returns and allowances minus purchase discounts.
Mandatory deductions on employee paycheck include – fed income tax, state income tax, fica tax (social sec, medicare)
Which of the following is not an element of the fraud triangle?
A. Rationalization.
B. Financial pressure.
C. Segregation of duties.
D. Opportunity. – C
vendor – a business from which merchandise is purchased or supplies or other assets are bought
Faithful representation – Information that accurately depicts what really happened
Accounts can be: – Permanent or temporary
Income statement or balance
Closed or not closed
Debit or credit
Additional paid in capital changes when…. – Treasury stock is sold for more than original cost and common stock is issured for more than par value
Generally Accepted Accounting Principles – generally accepted by accountants and financial service professionals that the guidance provides an accurate understanding of the operating results and the financial position of a company. GAAP
6 ( 2 – x )  >  3 ( 2 + x )  
Written off – When an account is determined to be collectible
ejercicio económico iniciado el, y finalizado el – fiscal year number, beginning, and ended
times interest earned ratio – (net income + interest expense + tax expense) / interest expense
Ending capital – Beginning capital+additional investment +net income-withdrawals
Closing Entries. – Entries made at the end of each reporting period to transfer the balances of the temporary owner's equity accounts to the permanent owner's equity account and to reduce the balance in the temporary owner's equity accounts to zero in preparation for the next accounting period.
capital stock – indicates the owners' contributions to a corporation
Period of time – Income statement, statement of owner's equity, and the statement of cash flows.
6 ( 2 – x )  >  3 ( 2 + x )  
proving the journal – a process which examines each page of a journal, confirming that the debit entries equal the credit entries on each page
service business – a business that performs an activity for a fee.

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