Accounting Unit 1

Profit – the amount of money left over after expenses are taken out
Contributed Capital – the amount of financing provided by owners of the business and earnings (contributed capital, retained earnings)
Reliability – accounting information is accurate free from bias
TEST!! Company side that ends up there – Anything recorded in the bank that is not in the financial statements yet
Sales Income, Accounts Payable, Accumulated ? – accounts that have a normal credit balance
income summary and withdrawal accounts are transferred to – capital account
Cost Standard – How much is expected to be paid for one quantity
What are some of the ways people try to reduce cognitive dissonance?  Describe them and describe how they might be used when a person who believes that it is important to give money to charities passess by a charity volunteer without donating any money.
Cash Flow from Investing Activities, and examples – CFI- Are cash flow related to the acquisition or sale of the company's productive assets. Example, the purchase of additional equipment.
Periodicity Assumption – The life of the business can be divided into artificial time periods. The result is useful reports that cover those periods can be prepared for the business. The basic fiscal (accounting) period is one year, but financial statements are usually prepared for shorter periods such as a quarter or month. The information presented then can be compared consistently with other like time periods for purposes of analysis and comparison.
Deposits in transit – Deposits recorded by the depositor that have not been recorded by the bank.
Owner-managers – when founders also function as managers of a business (common in new businesses)
Assets = Liabilities + Common Stock + Retained Earnings – Expanded accounting equation
Cost of Goods Available for Sale – The total cost spent on inventory that was available to be sold during a period.
Obligations (amounts owed) are reported on the balance sheet and are referred to as – Liabilities
Whаt аre sоme оf the wаys peоple try to reduce cognitive dissonance?  Describe them and describe how they might be used when a person who believes that it is important to give money to charities passess by a charity volunteer without donating any money.
#8. $2000 net income – $2000 net income
Cash flow process – 1) Cash on hand at the beginning of the period
2) Cash received during the period
3) Cash spent during the period
4) Cash on hand at the end of the period
Post Closing Trial Balance – a trial balance prepared after the closing entries are posted
Account Payable – Normal Balance: Credit
Type of Account: Liability
Financial Statement: BS
start-up – negative or very low cash flow from operating activities, negative cash flow from investing activities, and large fluctuations in cash flow from financing activities

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