Accounting Chapter 2

bond – a financial instrument in which a borrower promises to pay future interest and principal to a creditor in exchange fo the creditor's cash today
income statement – a statement that summarizes revenues and expenses for a period of time
Faithfully represent – Financial information that is complete, neutral and free from error
What is a liability? – A liability is something that the business is responsible for. This responsibility means that the business will have to pay off the liability at predetermined stage. Liabilities, therefore, place the business in debt and this debt must be settled.
Days Earned – • Growth in terms of fleet
• If higher, more efficient on getting back on the road
• % of days you rent the vehicle = % of days earned – occupancy
When recording depreciation does the accumulated depreciation expense go on the debit or credit side? – Debit
s corporation – allows a company to enjoy limited liability as a corporation but tax treatment as a partnership
balance sheet – describes a company's financial position (types and amounts of asssets, liabilities, and equity) at a point in time
Capital – The account used to summarize the owners equity in a business
entrepreneur – A person who make money by starting business.
A director or officer is not liable to the corporation for a bad business decision.
wholesaler – sell to retailers
Return on Equity – Net Income/Average Equity
Fraud – A dishonest act by an employee that results in personal benefit to the employee at a cost to the employer.
Gains – Increases in equity (net assets) from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period except those that result from revenues or investments by owners.
A directоr оr оfficer is not liаble to the corporаtion for а bad business decision.
Sole Proprietorship – business is not separate from the owner
accounts payable – Bought supplies on account: credit _________

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply