Accounting 1: Chapter 1 Century 21 9e

The account that provides a current or future benefit to the business is properly termed – An asset account
intangible assets – *patents
information processor – bookkeeper
Revenue – increase in owner's equity due to business operations
property, plant, and equipment – assets with relatively long useful lives that are currently used in operating the business
IAS – International Accounting Standards
Cost Accounting – Records all the costs that occur within a business, used to improve management
Gross Profit – Net Sales – COGS
The theory of low hanging fruit suggests that: 
prepaid insurance – insurance a business has purchased but not used yet. It is an asset
Goodwill and formula – Is the excess of the purchase price of a business over the fair value of the business's assets and liabilities.

Goodwill = Purchase Price – Fair value of identifiable assets and liabilities.

Transaction – Any business activity that changes assets liabilities or owners equity
NSF – Non sufficient Funds (Bad checks)
The theоry оf lоw hаnging fruit suggests thаt: 
service business – business that provides a service
The account analysis method estimates cost functions:
a. by classifying cost accounts as variable, fixed, or mixed based on qualitative analysis
b. using time-and-motion studies
c. at a high cost, which renders it seldom used
d. in a manner that cannot be usefully combined with any other cost estimation methods – a. by classifying cost accounts as variable, fixed, or mixed based on qualitative analysis
A business reansaction that involves a a purchased ON ACCOUNT – is considered to be a credit transaction.
The company issued common stock to owners for $100,000 cash
● The company purchased $50,000 of equipment by making a $20,000 cash down payment and signing a note payable for the balance – ● The company made a $13,000 cash payment on the note payable from the purchase of equipment
● The company sold a piece of equipment for $3,000 cash. The equipment was sold at cost, thus there was no gain or loss on the sale.
Debit balance – a condition that occurs when the total of the debits in an account is larger than the total of the credits in that account.

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