Accounting Chapter 5

Contribution Margin – the difference between the sales and total variable costs. It is the amount available to "contribute" towards covering fixed costs. Profitability is achieved when contribution margin is greater than fixed costs.
c. – Balance sheet—describes a company's financial position (types and amounts of assets, liabilities, and equity) at a point in time.
original cost basis – the amount originally paid for a depreciable asset
The account that provides a current or future benefit to the business is properly termed – An asset account
Special Journal. – A special journal designed to accumulate data about only one kind of business transaction.
muebles y útiles – furniture and fixtures
Financial statement – prepared to summarize the changes resulting from business transaction that occur during an accounting period.
MULTI-ATTRIBUTE ANALYSISLong lasting is ______ attribute. Low price is ______ attribute.
Controller – chief accounting officer
Operating Activities – Cash increases or decreases related to current assets and current liabilities
FOB Destination – seller pays the shipping charges and owns the merchandise until it is delivered to the buyer
Definition of transaction – A transaction is a documented transfer of economic value between accounting entity and another party

All transactions have a dual aspect,
ex. Inventory increases cash decreases

Define Revenue – Revenue is earnings of a business generated by selling products or providing services over a period of time.
MULTI-ATTRIBUTE ANALYSISLоng lаsting is ______ аttribute. Lоw price is ______ аttribute.
Dishonored Check – a check that a bank refuses to pay
Depreciation – Expense created by allocating the cost of plant and equipment to periods in which they are used; represents the expense of using the asset
Assets – Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.
Coporation – a business whose ownership is divided into "shares" which are "issued" (sold) to represent ownership
Posting – the process of recording a transaction in a ledger, posting records transactions to the General Ledgers that is a specific location where transactions are grouped

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