Accounting 610 Chapter 1

Acid test ratio – Quick assets divided by current liabilities
ethics – the principals of right and wrong that guide and individual in making decisions
Calendar year – a twelvemonth period beginning January 1st and concluding on December 31st.
Permanent Accounts – Carry their end-of-period balances into the next accounting period. Ex: Cash, accounts payable
stock dividends effect on stockholder's equity – transfers a portion of equity from retained earning to contributed capital
Fundamental Accounting Equation – The relationship between assets and liabilities plus the owner's equity.
Statement of Financial Position – what are the other names for balance sheet
The accounting process is correctly sequenced as: – C. identification, recording, communication
Tax Services – Provide help in preparing and filing of tax returns and the rendering of advice on the tax consequences of alternative actions.
cash discounts – A deduction from the invoice price granted to induce early payment of the amount due.
The state of Florida is experiencing a drought that has caused the price of water used by farmers to grow oranges to rise. This will cause a decrease in the:
Balance Column Account – Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry.
Chart of Accounts. – A list of all the account titles and the account numbers assigned to them.
Conservatism – When confronted with 2 different valuations choose the less favorable to provide cushion
Business entity assumption – Concept that assumes a business will be accounted for separately from its owner(s) and any other entity. (p. 11)
liability – when a company has a debt or obligation
What side of the journal entry are Dividends Payable recorded on when a company declares a cash dividend? – Credit
The stаte оf Flоridа is experiencing а drоught that has caused the price of water used by farmers to grow oranges to rise. This will cause a decrease in the:
Transaction – A business activity that changes assets, liabilities, or owners equity
FIFO – Calculate Total cost of inventory – Take most recent purchase (multiply units sold by this); use the next most recent to calculate left over units sold; = Cost of goods sold
A Decrease in proprietor"s capital can result in What (2) ways – 1. Owner taking assets out of business

2. Payment of an expenses

decision making – Inherent in each of the preceding management process.

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