Century 21 Accounting Chapter 6

accounting records – organized summaries of a business's financial activities.
Cash an all other current assets which are redily realizable in cash are called: – Quick Assets
Explain the Application of the Basic Principles of Accounting (3) – (3) Expense recognition principle: As a general rule, companies recognize expenses when the service or the product actually makes its contribution to revenue (commonly referred to as matching).
If there was no beginning work in process and no ending work in process under the weighted-average process costing method, the number of equivalent units for direct materials, if direct materials were added at the start of the process, would be:
a. equal to the units started or transferred in
b. equal to the units completed
c. less than the units completed
d. Both a and b are correct. – d. Both a and b are correct.
Sales – Ordinarily refers to only merchandise sold
Checks returned to the depositor that have been paid by the bank are – Canceled checks
optician – One who prescribes and dispense glasses and contact lenses and to detect eye diseases.
Current ratio – Current assets/current liabilities
It might be necessary to change an organization's leadership to ensure needed cultural change.
Securities Exchange Commission – government entity that regulates the information public companies are required to provide to investors. Public companies must follow GAAP and provide additional information. There is no law that privately held companies must follow GAAP
Partnership – Business is owned by two or more persons
Sole Proprietor advantages – Owner is own boss, can make all decisions, keeps all profit
Generally Accepted Accounting Principles – GAAP stands for
Direct Method – For preparing the operating activities section of the statement of cash flows, the approach in which cash receipts and cash payments are reported.
It might be necessаry tо chаnge аn оrganizatiоn's leadership to ensure needed cultural change.
Liability – An amount owed by a business.
subsidiary ledger – a ledger that is summarized in a single general ledger account
accounting – the process of identifying, measuring, and communicating economic information to various users

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