Accounting Chapter 4 Vocab

Customers – They have an interest in the information about the continuance of an entity, especially when they are dependent on the entity.
Public accounting – The segment of the accounting profession that relates to providing audit, tax, and consulting services to clients.
Statement of Retained Earnings – Shows the changes in retained earnings over an accounting period.
public accounting firm – provide clients a variety of accounting services including the independent audit.
Faithful representation – faithfull represents the phenomena that it purports to represent
operating expenses – total expenses directly related to operations
Patents – Granted by Feds. Holder has right to produce/sell product for 20 years.
Special journal – a log that is used to record and post transactions of a similar type
Required Sales Quantity in Units for a Before-tax Profit – Total Fixed Costs + Before-Tax Target Profit / Contribution Margin per Unit
financial statements – financial reports that summarize the effects of events on a business
An unconformity is
Equity – Owners claim on asstss may also be refrres to as net assets
account balance – The amount in an account.
Three Types of Partnerships – 1) General Partnership – is a partnership in which all partners are subject to unlimited liability. In this situation, all partners are considered to be general partners.
2) Limited Partnership – includes at lease on general partner who accepts unlimited liability and one or more limited partners with liability to the amount they invested.
3) Limited Liability Partnership
Net Worth Statement – A formal report that shows what an individual owns, what an individual owes, and the difference between the two.
Separate Entity Assumptions – Business transactions are accounted for separately from the transactions of the owners.
An uncоnfоrmity is
petty cash – an amount of cash kept on hand and used for making small payments
All of the following are needed to prepare a flexible budget EXCEPT determining the:
a. budgeted variable cost per output unit
b. budgeted fixed costs
c. actual selling price per unit
d. actual quantity of output units – c. actual selling price per unit
Withdrawals – assets taken out of a business for the owner's personal use
Partnership – -two or more owners
-spreads the workload

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