Principals Of Accounting Chapter 10 Vocabulary

Balance sheet – A financial statement that reports assets, liabilities, and owner's equity on a specific date.
Sales Invoice – a bill recording a sale on account
betterments – expenditures that improve or increase an asset's future service potential
*added to plant asset acct.
16.Toxic assets – are assets that have significantly declined in value.
withholding allowance – a deduction from total earnings for each person legally supported by a tax payer
This journal is used to record a purchase on account – Purchase journal
temporary accounts – accounts used to accumulate information until it is transferred to the
owner's capital account
Double Entry Accounting – a system of financial record keeping in which debit entries equal the credit entries for each transactions.
Specific identification method – d.
Accounting period – the length of time covered by a set of periodic financial statements
The correct sequence for aerobic metabolic breakdown of glucose is
Direct Cost – Costs easily and conveniently measured and traced to ONE product; Direct materials and direct labor are direct costs
Corporation – A type of ownership structure in which stockholders owns the business. Owner have very little influence on business decisions and owners risk is usually limited into their initial investment
Interest Coverage Ratio – (Net Income + Interest Expense + Income Tax Expense)/(Interest Expense)
*See if business has enough income to service its debt
A business that performs an activity for a fee – Service business
Standard Setting – is a political process in the sense that it seeks to consider alternative viewpoints and reach a consensus.
Balance Sheet – At a specific point in time:

Assets
Liabilities
Shareholders' Equity

The cоrrect sequence fоr аerоbic metаbolic breаkdown of glucose is
prepaid expense – cash paid for an expense in one fiscal period that is not used until a later period
OTHER REVENUE AND EXPENSES – REVENUE OR EXPENSE THAT IS OUTSIDE NORMAL DAY-TO-DAY OPERATIONS OF A BUSINESS, SUCH AS A GAIN OR LOSS ON THE SALE OF PLANT ASSETS

EXAMPLE: INTEREST EXPENSE

Accrual Basis of Accounting – Reporting income when its earned and expenses when they are incurred

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