Financial Accounting Ch 5

Going concern assumption – Assumes continued operation of accounting entity into a foreseeable future.
Understand the Objective of Financial Reporting – The objective of general-purpose financial reporting is to provide financial information about the reporting entity that is useful to present and potential equity investors, lenders, and other creditors in making decisions about providing resources to the entity.

Those decisions involve buying, selling, or holding equity and debt instruments, and providing or settling loans and other forms of credit.

Information that is decision-useful to capital providers may also be helpful to other users of financial reporting who are not capital providers.

Partnership – A business entity owned by two or more people who are legally responsible for the debts and taxes of the business.
EBIT(Earnings Before Interest & Taxes){Absolute measure} – Sales-COGS-SG&A-Depreciation-R&D
Partnership – Unincorporated association of two or more persons to pursue a business for profit as co-owners
claims – the assets of a business belong to the resource providers (creditors and investors)
diplomat – A person who is skilled dealing with other people.
Mercury is unique among the inner planets in having
32.A conglomerate – is a combination of two or more corporations engaged in entirely different businesses that fall under one corporate group, usually involving a parent company and many subsidiaries.
intangible assets – noncurrent assets without physical substance, often provide exclusive rights or privileges, useful life is often difficult to determine, usually acquired for operational use
administration costs – Verwaltungskosten
owner's equity – owner's right to the assets of the business
Mercury is unique аmоng the inner plаnets in hаving
. In what order are financial statements generally prepared? – income statement, statement of retained earnings and balance sheet
Trade Discount – A reduction in the list price granted to customers.
Income summary account – temporary account used only in the closing process to which the balance of revenue and expense accounts (including any gains or losses) are transferred; its balance is transferred to the capital account (or RE account)
A way to spread the cost of long-term assets over the periods in which they are used – Depreciation and why its necessary
general entry – a journal with two amount columns in which all kinds of entries can be recorded

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