Accounting Chapter 6

Opportunity Cost – Benefit lost to pursue a particular course of action
Plant asset value – An accounting form on which a business records information about each plant asset
Revenue – Total amount of goods and sales sold
income statement – a statement that summarizes revenues and expenses for a period of time
what is the GAAP? – -accounting principles with authoritative support
-set of rules that is understood by financial reports
-guide to action that can and does change over time
-differs among countries
The amount a company expects to collect from customers appears on the
A) Income statement in the expenses section
B) Balance sheet in the stockholders equity section
C) statement of cash flows
D) balance sheet in the current assets section – D) balance sheet in the current assets section
account – A comprehensive system for collecting, analyzing, and communicating financial information
Acknowledgment is a high level of collaboration.
Withdrawals – Assets taken from the business for the owners personal use
The smaller the residual term the:
a. stronger the relationship between the cost driver and costs
b. weaker the relationship between the cost driver and costs
c. steeper the slope of the cost function
d. gentler the slope of the cost function – a. stronger the relationship between the cost driver and costs
Acknоwledgment is а high level оf cоllаborаtion.
Planning, recording, analyzing, and interpreting financial informaation – Accounting
average cost – computer for all inventory available for sale during the period
Independent contractor – any person who agrees to perform a service for a fee and who is not subject to the control of those for whom the service is performed.

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