Accounting 202 Chapter 10

Accounting – The information system that identifies, records and communicates the economic events of an organisation to interested users
DEBT RATIO – TOTAL LIABILITIES / TOTAL ASSETS

RATIO REVEALS THE PROPORTION OF A COMPANY'S ASSETS THAT IT HAS FINANCED WITH DEBT

SMALLER IS BETTER

purchase journal – a book of original entry used to record purchases of merchandise on credit only
purchase invoice – an invoice used as a source document for recording a purchase on account transaction
Federal income tax payable – Liabilities
IASB – International Accounting Standards Board
Credit side – The right side of a standard account is called the
36.Reinsurance Company – is the insurance company that issues an insurance policy and guarantees the obligations of the insurance company.
Income statement – reports results of operations for a given period of time
-reports revenues( company's resources from providing goods or services)
-expenses (decreases in resources)
-can get net income
Groups of cells that have a similar structure or common function are called ______________.
The income summary account – D. is a temporary account.
interest revenue – money received for interest
FICA taxes – based on the Federal Insurance Contributions Act. Tax withheld from employees paychecks
When is an expense incurred? – When the service is received by the company even if the company does not pay int he same period the company receives the service.
Debit Merchandise & Credit Account payable – when a director buys a casket on credit the entry is
A business entity owned by one person who is legally responsible for the debts and taxes of the business. – sole proprietorship
Grоups оf cells thаt hаve а similar structure оr common function are called ______________.
Assets taken from the business for the owner's personal use – Withdrawals
company tax – kurumlar vergisi
Gross Profit – The difference between net sales and the cost of goods sold (gross profit = net sales – cost of goods sold).
Direct costs are traced the same way for actual costing and normal costing. – True
credit – the right side of an account.

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