Accounting Terminology

Pending Cash Funds – small amounts of cash kept on hand to pay for minor things. One person only
Expenses – the costs incurred in providing the goods and services for sale; that is, goods and services used up in earning revenue
What type of accounting provides the most accurate picture of a company's profitability? – Accrual
Inventory turnover ratio equation – Cost of goods sold divided by average inventory
business entity assumption – means that a business is accounted for separately from its owner or other business entities.
Restrictive Endorsement – Endorsement which uses the phrase, "for deposit only"
Realization principle – Revenue is recognized only after certain criteria are met
A liability must have ALL THREE of the following characteristics to be reported on the balance sheet – 1) require probable use of a future economic benefit (asset)

2) be owed

3) result from a past transaction

When doing a visual analysis and looking for possible intervention effects the researcher evaluates the ratio of variability between phases to the variability within phases.
Equity – the net worth of the business.
equivalent units of output – complete units that could have been
produced given the total amount of manufacturing effort
expended during the period.
Liability – An amount OWED by a business
Tracking what is happening in other companies is illegal. – False
expense – decrease in owners equity due to business operations.
Promissory note – a written promise made by a person or business to pay a certain sum of money to another person or business at a specified time in the future.
When dоing а visuаl аnalysis and lооking for possible intervention effects the researcher evaluates the ratio of variability between phases to the variability within phases.
Account Balance – The amount in an account

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