Accounting Unit 2

Monetary Unit Assumption – Money is the common denominator of economic activity and provides an appropriate basis for accounting measurement and analysis. The monetary unit is assumed to remain relatively stable over the years in terms of purchasing power. In essence, this assumption disregards any inflation or deflation in the economy in which the company operates.
balance sheet, income statement, statement of cash flows – 3 financial statements
Sales Invoice – A supplier's billing document.
Annual report – Background
Managaement discussion and analysis
selected financial data
Notes and supplemental disclosures
Auditors Report
Income Statement, Statement of Operations – reports revenues and expenses for the period
Average Cost – COGS and inventory are priced on the average cost of items available during the period
Contra Stockholders' Equity Account – Treasury stock. Carries a debit balance, the opposite of the tore equity accounts. Reported beneath retained earnings account on the balance sheet as a negative amount
accounting – planning,recording,analyzing, and interpreting financial information.
The instrument labeled #42 measures _____ and a normal reading is ____________
Withdrawals – Assets taken from the business for the owners personal use
Assets – Anything of value owned
Asset – a future economic benefit presently controlled by an entity as a result of a past transaction.
The instrument lаbeled #42 meаsures _____ аnd a nоrmal reading is ____________
What is the Cost principle? – An accounting principle that states that companies should record assets at their cost.
SALES RETURNS AND ALLOWANCES – DECREASES IN THE SELLER'S RECEIVABLE FROM A CUSTOMER'S RETURN OF MERCHANDISE OR FROM GRANTING THE CUSTOMER AN ALLOWANCE FROM THE AMOUNT OWED TO THE SELLER.

A CONTRA ACCOUNT TO SALES REVENUE

# 33. Generally Accepted Accounting Principles may best be described as: – the accounting standards and concepts used in the preparation of financial statements
Operating Expenses include….? – SG&A and R&D
ethics – the principles of right and wrong that guide an individual in making decisions.

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