Accounting Chapter 5

accrual basis accounting – Revenues are recognized when earned, even if cash was not received.
Expenses are recognized when incurred, even if cash was not paid.
foreign trade operations accounting – dış ticaret işlemleri muhasebesi
Net income / Average owners' equity – = ROI
Equity – Residual interest in an entity's assets that remains after deducting its liabilities. Equity is the "ownership interest," what owners' have invested in the business
Gross Profit on Sales – The revenue remaining after cost of merchandise sold has been deducted.
W-2 Form. – Wage and Tax Statement; a report furnished by the employer for each employee indicating gross earnings and deductions for income and F.I.C.A. taxes.
accrued – تكدس ، تراكم ، متجمع مُسْتحق
The Principle of Conservatism – -accounting for a business should be fair and reasonable
-assets or profits should not be overstated or understated when uncertainty exists
The risk of incorrect acceptance relates to the
Estimated Warranty Payable – Warranty may extend for 90 days-1 year. Company must record warranty expense in same period that business records sales revenue (expense recognition principle)
cash paid plus current dollar value of all non cash consideration given on the date of the exchange – historical cost
Sales Invoice – a bill recording a sale on account
chart of accounts – A numbering system in which a unique number is assigned to each account.
Cash – asset, increase and normal balance is debit side, decrease is credit side
The risk оf incоrrect аcceptаnce relаtes tо the
what are effective cash management? – Monitoring cash
-statement of cash flows identifies inflows and outflows
-statement of cash flows also identifies whether cash is increasing or decreasing
cash on hand
-day to day cost
Important activites
-manange receivables
-manage payables
-manage inventory levels
-invest excess cash
Natural Resources OR Intangible Assets – …Is a Debit balance account.
dividend – if business transfers some or all of its earned assets to owners
(on Financial statements)Financial position at the end of the period – balance sheet

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