Accounting: Debits & Credits

Owners equity – The amount remaining after the value of all liabilities is subtracted for the value of all assets
going concern – the assumption that an entity is not in the process of liquidation and that it will continue indefinitely
Analyzing – determining the fundamental significance of business transactions so that financial information may be properly processed.
Debt financing – Borrowing money
True of False:

The S.E.C designates the FASB as the organization to determine accounting standards for all public companies – True

36. Accountants are responsible for measuring various operating, investing and financing activities. Which of the following correctly matches the activity with its type?
A. Investing – paying utilities for the month.
B. Investing – purchasing land.
C. Operating – paying dividends to stockholders.
D. Financing – selling equipment for cash. – B. Investing – purchasing land.
credit balance – normal balance of liability,owner's equity and revenue accounts
Closing temporary accounts – the acronym REID is used when
Cash Discount – A discount offered by suppliers for payment received within a specified period of time.
If supplies that were ordered by a department financed by the General Fund are received at an actual price that is less than the estimated price on the purchase order, the department?s available balance of appropriations for supplies will be:
Entity prospective – Companies are viewed as separate and distinct from their owners ( present shareholders).

The assets are viewed as assets of the company and not of the specific creditor or shareholder.

Investors have claims on assets in the form of liability or equity claims and is consistent with the present business environment.

Fica taxes – Taxes paid for by employee and employer
Types of adjustments

Fyi – 1. Prepaid expenses: originally recorded as asset,
ex. Prepaid rent at end of month

2. Unearned revenues: initially in liability accounts,
ex pre paid rent received at end of first month

stockholder – one of the owners of a corporation
If supplies thаt were оrdered by а depаrtment financed by the General Fund are received at an actual price that is less than the estimated price оn the purchase оrder, the department?s available balance of appropriations for supplies will be:
Debtors – People that owe money to a business
NSF check – a check that is not paid by a bank because of insufficient funds in a bank
limited liability company (LLC) – A business form consisting of one or more persons or entities filing an operating agreement with a state to conduct business with limited liability to the owners, yet treated as a partnership for tax purposes.
What classification of ratios is defined as a measure of a firm's financial leverage and ability to meet its long-term obligations? – Solvency Ratio
**ON EXAM**
If the total debit column exceeds the total credit column of the income statement columns on a worksheet, then the company has – C. Suffered a net loss for the period

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