Principles Of Accounting Level 1 Chapter 1

Intangible Assets (Non-Current Asset) – Assets that have no physical presence but represent an investment by the firm.
E.g. goodwill, trademark and patents.
Corporation – stockholders, not personally liable
FOB shipping point means that the
A. goods are placed free on board to the buyer's place of business.
B. buyer pays the freight.
C. seller pays the freight.
D. common carrier pays the freight. – B
#12. All of the accounts of a business entity taken together comprise the: – ledger
goodwill – is the amount that is paid when acquiring a company that is greater than the fair market value of net assets acquired. A company is willing to pay more than the fair market value of net assets because the business is established and has the ability to generate more future cash flows than the individual assets
Subsidiary ledger – A ledger that is summarized in a sugar general ledger account
sales revenue – revenue, IS, credit
Describe the characteristic of reliability. – Reliability means that information is free from material error and bias. In other words, different independent people looking at the evidence will arrive at the same values.
Cash flow – The movement of cash into and out of a business
The ________ of a word is its literal or dictionary meaning.
Equipment – Equipment
Asset
Balance Sheet
Debit
Petty Cash Slip – A form showing proof of a petty cash payment
Journal entries are required by the depositor for all of the following except
A. collection of a note receivable.
B. an NSF check.
C. bank service charges.
D. bank errors. – D
The ________ оf а wоrd is its literаl оr dictionаry meaning.
for-profit businesses – operate to earn money for their owners
Liquidity Ratios – "current"
receivables turnover ratio
average collection period
inventory turnover ratio
average days in inventory
current ratio
acid-test ratio
Adjusting Entries – Journal Entries recorded to update general ledger accounts at the end of a fiscal period.

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