Accounting Chapter 1

Petty cash funds – A cash fund used to pay relatively small amounts.
Same functions as private accountant but employed by federal, state, or local government agency – Government accounting
financial accounting – focuses on reporting information to external users
Polictical cost – Cost imposed on an entity by regulation, taxation and public scrutiny
Long Term Assets – Tangible and Intangible – PP&E, Natural Resources, Trademarks, Patents, Goodwill
Debit side – The left side of a standard account is called the
Income Statement – a financial statement showing the revenue and expenses for a fiscal period.
Depreciation – The allocation of the cost of an asset to expense over its useful life (cost / years of life)
A planned process for providing financial information that will be useful to management – Accounting System
The mechanical force of contraction is generated by:
deferral – when exchange of cash takes place before the revenue is earned or the expense is incurred
Freight Out – The transportation cost to ship goods out of the seller's warehouse; therefore, it is freight goods sold to a customer.
Output Devices – Component of accounting system: These allow the user to see the accounting information. In a computerized accounting system, these include monitors, printers, printed reports, and output to files.
Accounting Equation – An equation showing the relationship among assets, liabilities, and owner's equity.
Dividends – decrease equity, debit balance
Liability, Balance Sheet, Credit, Permanent – Utilities Payable
The mechаnicаl fоrce оf cоntrаction is generated by:
internal audit – внутренний аудит
#45. Calculate the amount of total assets at January 31, 2002. – 2002 total assets + capital contributions minus inventory cost + inventory sold minus utility bills + land price minus down payment
Ledger – The entire group of accounts maintained by a company
What are the steps for preparing a trial balance on a worksheet? – 1. Write acc. title
2. Record debit and credit balances
3. Draw a single line at the bottom
4. Add the totals
5. Write totals
6. Draw a double line at the bottom

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