Accounting Basics

In a bank reconciliation, outstanding checks are
A. deducted from the book balance.
B. added to the book balance.
C. added to the bank balance.
D. deducted from the bank balance. – D
Accounting system – a planned process for providing financial information that will be useful to management
asset: anything of value that is owned
Customer – A person/business to whom merchandise/services are sold.
External users – Person using accounting information who are not directly involved in running the organization.
revenue expenditure – ordinary repairs journal entry – expense
Property, Plant, and Equipment – Assets that are expected to serve the business for many years. Also called Plant Assets or Long-Term Assets.

Examples; Land, Buildings, and Equipment.

to treat – обращаться, обходиться, вести себя, относиться
nine steps to close an account – transaction occur,journaling,posting,trial balance,worksheet,finacial statements,journalize and post adjusting entries,journalize and post closing entries,post-closing trial balance
Account balance – The amount in the account
Expanded Accounting Equation – Assets = Liabilities + Equity; Equity equals [Owner capital – Owner withdrawals + Revenues – Expenses] for a noncorporation; Equity equals [Contributed Capital + Retained earnings + Revenues – Expenses] for a corporation where dividends are Subtracted from retained earnings.
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withholding allowance – a deduction from total earnings for each person legally supported by a taxpayer, including the employee.
If Option 1 costs $100 and Option 2 costs $80, then the differential cost is $180. – False:
If Option 1 costs $100 and Option 2 costs $80, then the differential cost is $20.
Liquidity – The ease with which an item can be converted into cash.
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journal entry and journalizing – the 1st record of any business transaction is the journal entry. the process of writing it down is called journalizing
Inventory – Goods owned and held for sale to customers, and current assets
Bank Draft. – A check drawn by one bank on another bank in which it has funds on deposit.

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