Principles Of Accounting Vyc1

Periodicity of Income Assumption – Periodicity is the idea that economic activities of an entity can be divided logically and identified with specific time periods, such as the year or quarter.
Sales invoice – a document that provides support for credit sales
Owner's equity – Amount remaining after the value of all liabilities is subtracted from the value of all assets
Materiality Constraint – if the item doesn't make a difference, companies don't need to follow GAAP
quality of earnings – indicates the level of full and transparent information that a company provides to users of its financial statements
Patents – Granted by Feds. Holder has right to produce/sell product for 20 years.
A person who is lactose intolerant:
ACCUMULATED DEPRECIATION – THE SUM OF ALL DEPRECIATION EXPENSE RECORDED TO DATE FOR AN ASSET (CONTRA-ASSET)
Adjusting entries – Корректирующие проводки
normal balance for equity? – right
accounts payable – liabilities

amounts owed to suppliers, normally paid in 30-60 days

suppliers are those who provide inventory and services over and over again, each month

Credit side – the right side of a standard account is called the
The left side of a T account is – the debit side
Define Controls – Controls are procedures and methods used to protect assets, monitor cash payments, ensure transactions are authorized and generally make sure the accounting records are accurate.
A persоn whо is lаctоse intolerаnt:
prevention costs – cost incurred to prevent defects in products or
services being produced.
Net Present Value Method – used to compare the present value of cash inflows to the present value of cash outflows at a given required rate of return. Establishing a present value for all cash flows allows a comparison of cash in and cash out in equivalent dollars.
Net Sales – The difference between the balance in the Sales account and the balance in the Sales Returns and Allowances account.
operating cycle – average time required to purchase inventory, sell it on account, and then collect cash from customers

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