Financial Accounting

T account – a skeleton form of an account used for instructional purposes.
Purchase allowance – A deduction made to the selling price of merchandise, granted by the seller; so that the buyer will keep the merchandise.
Long term investments/ non current assets – Securities the company intends to hold for longer than one year
-note receivable
-government bonds
comparability – ability to compare the accounting information of different companies because they use the same accounting principles
Accounts Recievable – Debit Balance, Balance sheet, permanent, asset
Secondary market – The trading of securities after they have been issued
Hale Company sells merchandise on account for $1,000 to Long Company with credit terms of 2/10, n/30. Long Company returns $200 of merchandise that was damaged, along with a check to settle the account within the discount period. What is the amount of the check?
A. $980
B. $780
C. $800
D. $784 – D
What is the profit formula? – Profit = Revenue – Expenses
If revenue is higher than expenses = net profit
It revenue is lower than expenses = net loss
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Contra Stockholders' Equity Account – Treasury stock. Carries a debit balance, the opposite of the tore equity accounts. Reported beneath retained earnings account on the balance sheet as a negative amount
Statement of Owners Equity – Shows beginning OE(capital), events that increase it(owner investments and Net Income), events that decrease it(withdraws and net loss).
fiscal period – the length of time for which a business summarizes its financial information and reports its financial performance
shrinkage – , a term that reflects decreases in inventory for reasons other than sales to customers.
Equity – Asset-Liability
The owner's financial interest in the business
Variable Cost – unit cost stays the same no matter what happens with activity
total cost goes up or down in direct proportion to changes in activity or volume
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A loan from a bank secured by property is – A mortgage payable

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