Accounting 1: Chapter 1 Century 21 9e

Qualitative Characteristics: Fundamental Qualities: Faithful representation are… – 1. Completeness
2. Neutrality
3. Free from error
Kaiser's Kraft Korner sells a single product. 7,000 units were sold resulting in $70,000 of sales revenue, $28,000 of variable costs, and $12,000 of fixed costs.

The number of units that must be sold to achieve $60,000 of operating income is:
a. 10,000 units
b. 11,666 units
c. 12,000 units
d. None of these answers are correct. – c. 12,000 units
10X – 4X – 12,000 = 60,000; X = 12,000 units

Comparability – Financial statements must be comparable between different companies and time periods
Industrial market – business to business market
Сопоставлять итоговые данные – Balance the totals
The revenue recognition principle – ii.
Sales invoice – A document that supports each credit sale.
4 Financial Statements – Income statement
Statement of Retained Earnings
Balance Sheet
Statement of Cash Flows
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Current assets are assets expected to be converted to cash, sold, or consumed: – within the nex 12 mths
useful life – the estimated life of a fixed asset
balance sheet – A financial statement that reports assets, liabilities, and owners equity of a specific date
Capital Stock – 1. Owners Equity
2. Balance Sheet
3. Credit
4. Permanent
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Other revenues and gain – A nonoperating-activities section of the income statement that shows revenues and gains unrelated to the company's main line of operations.
Intangible Assets. – Those assets that cannot be touched or grasped (examples include patents, copyrights and goodwill).
Net Pay – take home pay after deductions
Publicly Traded – A company with stock that can be bought and sold by investors on established stock exchanges.

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