Century 21 Accounting Chapter 1

Contribution Margin Ratio – Percentage; Gives the amount as a percent of every sales dollar that is added to operating income when sales dollars increase.
petty cash fund – fund for purchases of the small variety; employees make purchases and submit receipts for reimbursement.
Dougherty Company employs 20 individuals. Eight employees are paid $12 per hour and the rest are salaried employees paid $3,000 a month. How would total costs of personnel be classified?
a. variable
b. mixed
c. a variable cost within a relevant range
d. a fixed cost within a relevant range – b. mixed
#37. The current ratio at December 31, 2002, rounded to the nearest tenth, is equal to: – total liabilities divided by total current liabilities
Warranty Liabilities – Seller's obligation to replace or correct a product that fails to perform as expected within a specified period
Revenues – goods or services have been provided to the customer
The demand curve for bonds has the usual downward slope, indicating that at ________ prices of the bond, everything else equal, the ________ is higher.
Internal controls and fraud – -PREVENTATIVE : detect a problem before it occurs
-DETECT: unconver problems after they occur
ex. supervision
Statement of retained earnings—explains changes in equity from net income (or loss) and from any dividends over a period of time. – b.
"Operating Return on Assets" Classify, Calculate, and Interpret – Operating Profitability Ratio

= [ Operating Income(EBIT) / Average Total Assets ]

This measure includes both TAXES and INTEREST

The demаnd curve fоr bоnds hаs the usuаl dоwnward slope, indicating that at ________ prices of the bond, everything else equal, the ________ is higher.
Convertible – A bond feature that allows the lender to convert each bond into a specified number of shares a common stock.

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