Accounting Chapter 4

Accounting Cycle – A series of steps performed during each accounting period to classify, record, and summarize data for a business and to produce needed financial information.
To whom does a company pay input vat? – To suppliers
Capital Expenditures – Big items that go on balance sheet. Ex: Land, equipment…
Interest Expense – Expense
Income Statement
Direct Method – Format directly states the amount of cash that is collected and the amount of cash that is paid for specific items during the period. Everything from Investing down is the same as Indirect Method.
THE DIRECT METHOD IS FAVORED BY FASB AND IASB. Very few companies use direct method.
corporation – a form of entity organized under the laws of a particular state; ownership evidenced by shares of stock
Which of the following is the form of marriage which is legally recognized in the United States?
Account tile – The name given to an account is called account tile
desafectación de reservas – reversal of reserves
GAAP inventory – Financial statement should be easily understood. Faithful representation. Consistent from period to period
monetary unit assumption – we can express transactions in money
memorandum – A form on which a brief message is written describing a transaction
internal auditors – Those professionals who look at controls and procedures in use by their employer.
Which оf the fоllоwing is the form of mаrriаge which is legаlly recognized in the United States?
Bilateral Modification – Change to a contract that requires signatures of both the contractor and the contracting officer.
Long-term Notes Payable – Long-term Liability
Posting – Transfering info from a journal to a ledger

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