Accounting General Journal, 9e: Chapter 01

IAS 37 Provisions, Contingent Liabilities and Contingent Assets – * PROVISIONS (more than 50% likelihood of occurrence) – a liability of uncertain timing/amount; company has obligation as result of a past event; a reliable financial estimate can be made
* Recognised in FS as a liability & disclosed in notes
* CONTINGENT LIABILITIES (less than 50% likelihood) – a possible obligation from past events whose outcome is based on uncertain future events OR an obligation not recognised because it is not probable/cannot be reliably measured
* Possible – no liability recognised in FS, disclosed in notes
* Remote – no liability recognised in FS & no note disclosure
* CONTINGENT ASSETS – a possible asset arising from past events but can only be confirmed by uncertain future events
* Should NOT ever be recognised as this is not prudent until virtually certain
* Disclosed only where an inflow of economic benefit is probable (not when only possible or remote)
* Probable – no asset recognised in FS, disclosed in notes
* Possible – no asset recognised in FS, no note disclosure
* Remote – no asset recognised in FS, no note disclosure
general partner – The member(s) of a limited partnership who has (have) unlimited liability for the debts of the partnership
Permanent accounts – accounts that are continuous from one accounting period to the next; balances are carried forward to the next period (for example, assets, liabilities, and owner's capital accounts).
Other Revenue – earnings of the business not relating to the core work of the business. Eg Interest earned; dividends earned
earnings – used to describe when revenues exceed expenses (net income & net profits)
Arizona Teak Company paid $54,000 for computers. These computers have an estimated service life of 3 years and a salvage value of $3,000. After one year of use, the book value of the computers will be: – $37,000
Trace the development of the Industrial Revolution in the United States and examine the impact it had on the country in the first half of the 19th century. Transportation and Communication Revolutions Growth of roads Water transportation Railroads Telegraph War of 1812 III. Factories Early textile manufactures The Lowell system Impact on environment Urbanization Urban Culture Immigration Nativism Organized Labor Professions
Which of the following budgets would NOT be useful in preparing a company's projected income statement?
a. Sales budget
b. Cash budget
c. Selling expenses budget
d. General and administrative expenses budget. – b. Cash budget
check – a buisness form ordering a bank to pay cash from a bank account
intangible assets – those assets that cannot be touched or grasped (examples include patents, copyrights and goodwill)
The process of identifying, measuring, analyzing, and communicating financial information needed by management to plan, evaluate, and control an organization's operations is called

A. financial accounting.

B. managerial accounting.

C. auditing.

D. tax accounting. – B. managerial accounting.

Trаce the develоpment оf the Industriаl Revоlution in the United Stаtes and examine the impact it had on the country in the first half of the 19th century. Transportation and Communication Revolutions Growth of roads Water transportation Railroads Telegraph War of 1812 III. Factories Early textile manufactures The Lowell system Impact on environment Urbanization Urban Culture Immigration Nativism Organized Labor Professions
Federal Insurance Contributions Tax (FICA). – A Federal act which requires most employer and employees to pay taxes to support the Federal social security program.
Ways to improve ROI – -increase profit margin
-increase asset turnover
Periodic inventory system

Plus formula – computes figures from the physical count, at beginning and end of period.

The formula is:

Beginning + purchases inventory – ending inventory = cogs

Source Document – Proof that a transaction occurred
When balancing the cash box, you discover a $30 overage. Prioritize the steps you would use to find or account for this mistake. – • Recount the money
• Check open and closed tickets for money taken in and amount receipted
• Notify the area manager because the amount is over $20
• 0805 overage

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