Accounting Vocabulary Chapters 79

When recording depreciation does the accumulated depreciation expense go on the debit or credit side? – Debit
GAAP – The set of rules that all accountants use to prepare financial reports.
Posting – the transferal of data from the journal to the ledger.
monetary unit assumption – requires that only those things that can be expressed in money are included in the accounting records
appraisal costs – cost incurred to determine whether products and
services are conforming to requirements
Prepaid insurance/prepaid rent – Prepaid expenses which are treated as assets because they are not yet used.
quality of earnings ratio – a measure used to indicate the extent to which a company's earnings provide a full and transparent depiction of its performance; computed as net cash provided by operating activities divided by net income
for the period ended- covers a period of time- month, quarter, year – dates on Income Statement, Retained Earnings Statement, and Statement of Cash Flows
adjustment – changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period
If a user typically accesses his bank’s Web site from his home computer on nights and weekends, then this information can be used to establish a ____ of typical access.
Drawing Account – account from which owner takes money or assets from the business from personal use (withdrawals)
The price quoted for a one-time-only special order may be less than the price for a long-term customer. – True
If Sales Revenue is $400,000, Cost of Goods Sold is $310,000, and Operating expenses are $60,000, the Gross profit is
A. $30,000.
B. $90,000.
C. $340,000.
D. $400,000. – B
Abstract of Offers – Record of all bids received on an unclassified sealed-bid procurement.
FASB – Financial Accounting Standards Board. Private organization formed to establish GAAP. 1973. has 7 full-time representatives, some accounting professionals, represent different perspectves
Retained earnings – Amount of net income retained in the corporation
If а user typicаlly аccesses his bank’s Web site frоm his hоme cоmputer on nights and weekends, then this information can be used to establish a ____ of typical access.
liquidity ratios – measure the short-term ability to pay maturing obligations and to meet unexpected needs for cash.
The purpose of budgeting – 1) Budgeting assists planning by predicting what is likely to occur in the future. This allows the owner to prepare in advance to manage possible problems or take on possible opportunities.
2) Budgeting aids decision making by providing a standard against which actual performance can be measured. This allows the owner to identify areas in which performance in unsatisfactory and take action.
An example of internal user is managers – a.
Owner withdrawal – are assets an owner takes from the company for personal use

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