Century 21 Accounting Chapter 3

Cost of Goods Available for Sale – The total cost spent on inventory that was available to be sold during a period.
REALIZATION – earnings process is complete or cash recieved for work already done
Accounting – Planning, recording, analyzing , and interpreting financial information
Inventory Turnover – The number of times inventory is purchased and sold during the accounting period (inventory turnover = cost of goods sold + average inventory).
Periodicity Assumption – Although the lifetime of a business is uncertain, it is nonetheless useful to estimate the business's net income in terms of accounting periods.
GAAP – Generally accepted accounting principles.
Accounting systems – The process for providing financial information that will be useful to management
Capitalized interest – Interest costs we add to the assets account rather than record them as interest expense
what is a contra account? – an account with a balance that is opposite, or "contra", to that of its related accounts. normal balance is credit.
Selling expenses – advertising expense
sales commission and salaries
freight out
Type just the number that answers the question. Do not type anything else. In an assignment problem LP, all the constraints are set equal to (or less than) what number?
operating cycle – time it takes the company to spend cash to do business and get the cash back again, typically less than one year
Slope is also known as – Variable cost
CONSERVATISM – Lower of cost or market is used to value inventories.
Estimated Residual Value (AKA scrap value) – Expected cash value of an asset at the end of its useful life. NOT depreciated
Declining balance – The amount decreases at a constant rate as the life of an asset progresses; a method that allocates a greater amount of depreciation to the first years of an asset's life: used for income tax purposes
Companies typically wait for accurate information regarding actual manufacturing overhead costs before pricing a job. – False
Type just the number thаt аnswers the questiоn. Dо nоt type аnything else. In an assignment problem LP, all the constraints are set equal to (or less than) what number?
check – A business form ordering a bank to pay cash from a bank account

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