Accounting Chapter 4 Vocabulary

Requires a high degree of consensus among individuals on a given measurement. – Verifiability.
utilities payable – current liab
business transaction – An economic event or condition that directly changes an entity's financial condition or directly affects its results of operations.
Indirect Cost – Cannot be easily and conveniently traced to one product; These costs are incurred to support the manufacturing of ALL products; Manufacturing overhead and most period costs are indirect costs.
The value of scrap material can have either a high or low sales value relative to the product with which it is associated. – False
account title – the name give to an account
Statement of cash flows – explains how a company obtained and used cash during the accounting period
Since cost is a reliable measure to use in financial accounting, the cost principle states that assets and services should be recorded at their actual cost. – True
Debit balance – a condition that occurs when the total of the debits in an account is larger than the total of the credits in that account.
Which analysis, if any, is applied to territorial and customer restrictions imposed by a manufacturer on a retailer?
previsión para descuentos y bonificaciones – allowances for discounts and rebates
Net Sales – 1.) Sales Discounts
2.) Sales Returns & Allowances; Credit Card Discounts/Charges.
management (or managerial) accounting – The branch of accounting that uses both historical and estimated data in providing information that management uses in conducting daily operations, in planning future operations, and in developing overall business strategies.
matching principle – records expenses when incurred to sell goods or provide services
journalizing – the process of recording business transactions in a journal
General journal – A journal with two amount columns in which all kinds of entries can be recorded
Which аnаlysis, if аny, is applied tо territоrial and custоmer restrictions imposed by a manufacturer on a retailer?
Decrease in accounts payable – decrease liability
income tax – short section reporting federal and state taxes levied on income from continuing operations
withdrawal – removal of cash or other assets from a business or account

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