Accounting Quiz 3 Laurie Wood

Journal Entries for Short Term Notes Payable – Debit Inventory, and Debit ST Note Payable THEN
Debit Interest Expense and Credit Interest Payable
transposition error – an amount written with the digits in incorrect order
Deferred – To delay until a later date
What are the 5 ratios that determine a firm's ability to pay its short-term liabilities? – Current Ratio, Quick Ratio, Cash Ratio, Defensive Interval, Cash Conversion Cycle
Accounts Payable – arise from the purchase of goods or services from suppliers on credit without a formal written contract (or note)
retained earnings – equity earned by profitable operations that is not distributed to stock holders
Creditors – Individuals or organizations entitled to receive payments.
Different types of fraud – -embezzlement
-filing false insurance claims
-financial statement fraud
Capital – What the business owes the owner
recording more revenue than is earned requires an adjusting entry that will include – a credit to unearned revenue
Which of the following statements is true about the difference between contracts in common law and civil law systems?
carrying value – also known as the book value
Faithful Representation – information that is not biased
Which оf the fоllоwing stаtements is true аbout the difference between contrаcts in common law and civil law systems?
The accrual basis of accounting – Matches revenue earned with expenses necessary to produce the revenue during the accounting period.
FOB shipping point – Freight terms indicating that the seller places goods free on board the carrier, and the buyer pays the freight costs.
healthy balance sheet – eine gesunde Bilanz
Accounting Equation – Assets = Liabilities + Owner's Equity
Assets = Liabilities + OE + Net Income
Assets = Liabilities + OE + (Rev-Exp)

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