Accounting Basics

potter – one who makes pots, cups, etc.
depreciation rate – Abschreibungssatz
Underallocated indirect costs occur when the allocated amount of indirect costs is greater than the amount incurred for that period. – False
Depletion – Process of allocating the cost of natural resources to periods when they are consumed and sold
interest expense – cost of money (borrowing) over time
The reliability principle is also called the – objectivity principle
Retained Earnings – represents the cumulative net income of the entity
Corporation – An organization with the legal rights of a person and which many persons may own.
Phil Casey, Capital – ANN ACCOUNT THAT represent an owners 's equity of debit and credits in ledger account
A heart specialist would be called a:
Income statement – A financial statement showing the revenue and expenses for a fiscal period.
losses – sell an asset and receive less for the asset than the amount the asset was reported on the balance sheet
Land – Asset
Land, does not diminish over time
DR +
Accounts Receivable Turnover – (Credit Sales)/((B A/R + E A/R)/2))
*Compare against business collection policy to check
365/ A/R Turnover gives how many days for turnover
INCOME SUMMARY – A TEMPORARY "HOLDING TANK" ACCOUNT INTO WHICH REVENUES AND EXPENSES ARE TRANSFERRED PRIOR TO THEIR FINAL TRANSFER TO THE RETAINED EARNINGS ACCOUNT
Events – Happenings that both affect an organization's financial position and can be reliably measured
A heаrt speciаlist wоuld be cаlled a:
Matching Principle (one of the accounting principles) – prescribes that a company must record its expenses incurred to generate the revenue reported.

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