Accounting 2301 First Exam

GAAP (Generally Accepted Accounting Principles) – Általánosan elfogadott könyvelési alapelvek
income statement – shows the amount the business earned during a period of time

Net income or loss is the total earned from providing goods and services to customers (REVENUES) less what it costs to provide the goods and services to the same customers (EXPENSES)

Equity – The difference between assets and liabilities
Principles & Assumptions of Accounting 2: Revenue Recognition Principle – provides guidance in when a company must record its expenses incurred to generate the revenue
The four things that change when goods are provided to customers on account: – 1. Revenue (sales) occur when the goods are provided to the customer
2. The customer pays the company now (cash) or in the future (accounts receivable)
3. The goods provided to the customer is the asset inventory (less inventory).
4. The cost of the inventory used up is reported as an expense called cost of goods sold.
Gross profit – the profit that a company generates when considering only the sales price and the cost of the product sold
Cash – …Is a Debit balance account.
A journal designed for entering only purchases of merchandise on account is called a/an: – Purchases Journal
Homologous traits are found in two or more species because
T account – An accounting device used to analyze transactions.
3. Conservatism – When you hear anything that will reduce the value of the company, you must record it immediately.

Basically record bad news as soon as they happen

disadvantages of bonds – 1. bonds can decrease return on equity
2. bonds require payment both payment of both periodic interest and the par value at maturity
"Gross Profit Margin" Classify, Calculate, and Interpret – Operating Profitability Ratio

= [ Gross Profit / Revenue ]

Analysts should be concerned if this ratio is too low.
LOW: Prices are are not high enough or costs are too high
HIGH: Increase in prices or reduced costs

Hоmоlоgous trаits аre found in two or more species becаuse
Dividends – Distribution to stockholders

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