Accounting Chapter 2

7. Which definition below best describes financial accounting?
A. Process of measuring income taxes owed to the government.
B. System of maintaining communication with a company's customers and suppliers.
C. Procedures designed to enhance the company's image to potential investors.
D. Measuring business activities and communicating them to external parties. – D. Measuring business activities and communicating them to external parties.
Comparable – From year to year for one company, across companies for a single year, to industry averages
An Independent accountant who provides accounting services to the public for a free. – Certified Public Accountant [cpa]
What are the two main reasons for recognizing an expense – To keep track of the amount and type of expenses occurred and to show the reduction of owner's equity
Final Processing/Reporting. – The process of communicating the results achieved during accounting period to others.
purpose of the closing entries – to prove the equality of the permanent account balances that the company carries forward into the next accounting period
Loss – Excess of expense over revenue
A T-account is: – A. A way of depicting the basic form of an account
shareholders
stockholders – Aktionär
A statistician keeps track of the speed of every serve that a player hits during a tennis tournament. The average speed for one particular player was 90 mph and the standard deviation was 6 mph. The distribution of speeds has a bell-shaped curve.   Based on the Empirical Rule, which of the following is true?
rubros patrimoniales – balance sheet items
Office Supplies – …Is a Debit balance account.
Give five examples of a retail business? – Shoe store, supermarket, restaurants, clothing store, iTunes
MATCHING PRINCIPLE – Intangible assets are capitalized and amortized over periods benefited.
(cash flows) sale of treasury stock – financing activities (add)
Definition of Expenses – Expenses is an outflow of economic benefit (or decrease in inflow) in the form of an decrease in assets (or increase in liabilities) that decreases owners equity (expect for drawings)
Expenses is recorded in Cash Payment Journal.
(Cash paid for any item for running the business that cannot be reused)
Expenses includes Advertising, Supplies (of stock), Interest Paid, Petrol, Wages, Electricity, Insurance, Telephone, Materials, Office Expenses, Repairs, Cleaning, Postage, Delivery Expenses, Interest on Loan, Bills.
Expect from Drawings, Mortgages, GST Paid, Creditor repayment, repayment of loan, cash drawings.
A stаtisticiаn keeps trаck оf the speed оf every serve that a player hits during a tennis tоurnament. The average speed for one particular player was 90 mph and the standard deviation was 6 mph. The distribution of speeds has a bell-shaped curve.   Based on the Empirical Rule, which of the following is true?
Net Pay – The total earnings paid to an employee after payroll taxes and other deductions
Balance sheet – A financial statement that reports assets, liabilities, and owner's equity on a specific date.
Double entry accounting – recording of debit and credit parts of a transaction

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