Accounting Terms Chapter 912

Matching Principle – expenses for an accounting period should be matched with the revenue generated during the same period to derive an accurate net income for that period.
Z company's accountant forgot to make an adjustment at the end of the year to record depreciation expense on the equipment. What effect did this omission have on the company's financial statements – Overstated assets and shareholder's equity
The inventory turnover is good – When it is appropriate for the type of goods sold. When it is improving from one year to the next. When it is equal to or better than the average norm for the kind of business
fiscal year – a fiscal period consisting of 12 consecutive months
Common Stock – Represents the shares issued at par value.
Financing – -Raising cash by issuing stock (equity from stockholders) or borrowing cash (liability to creditor)
Posting – transfer of information from a journal to the general ledger and any subsidiary ledgers
FIFO – An inventory method in which the first costs into inventory are the first costs out to cost of goods sold. Ending inventory is based on the costs of the most recent purchases.
Re-classifications – The initial recording of a transaction does not result in assigning revenues to the period in which they were earned or expenses to the period in which they were incurred
account balance – Difference between total debits and total credits (including the beginning balance) for an account.
Everything else held constant, an increase in the liquidity of bonds results in a ________ in demand for bonds and the demand curve shifts to the ________.
Financial statements – Reports that summarize the financial condition and operations of a business
66. Which of the following items is reported in the statement of stockholders' equity?
A. Total assets.
B. Total expenses.
C. Net income.
D. Operating cash flows. – C. Net income.
Timely – Relevant information must be available to decision makers before it loses its capacity to influence decisions
specific identification – the actual cost paid for units still here = ending inventory, actual cost paid for units sold = COGS
stock dividend – corporations distribution of its own stock to its stockholders without receipt of any payment
Everything else held cоnstаnt, аn increаse in the liquidity оf bоnds results in a ________ in demand for bonds and the demand curve shifts to the ________.
At a particular date- often called a "snapshot" in time – dates on the Balance Sheet
Withdrawals – assets taken out of a business for the owner's personal use
bond – облигация, закладная

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