Accounting General Journal, 9e: Chapter 01

John Smith is employed as a local funeral home and is paid on an hourly rate of $5.00 per hour. He is also paid time and a half for any hours worked in excess of 40 hours per week. For the current pay period, he worked a total of 60 hours. If his FICA tax is 6%, and his withholding is 10%, what is his take-home pay for the week? – $294.00
Payroll Clerk – The person who is responsible for preparing the payroll.
The things one owns are – Assets
Plant and Equipment – Property that will be used in the business for longer than one year.
Operating Income – Measurement the results of the entity's major ongoing activities. Gross profit minus operating expenses.
Payments Journal – An Accounting record of all cash paid to other entities
expense – a decrease in owne's equity resulting from the operation of a business.
This material typically cannot move through the capillary wall.
accounting system – A planned process for providing financial information that will be useful to management.
Inventory values matter because… – Inventory values directly affect cogs affecting the reported profits

They are often manipulated to produce higher reported profits for the shareholders or lower reported for the tax authorities

property – is anything of value that is owned or controlled.
Asset – any economic resource expected to benefit a firm or an individual who owns it
The recording process steps : – 1. Analyze each transaction
2. Transfer the info to the appropriate accounts in the LEDGER
Credit Memorandum – A note verifying that a customer's account is being reduced by the amount of a sales return or sales allowance plus any sales tax that may have been involved.
Statement of Financial Condition; Balance Sheet – The report that shows the financial condition of the business at a point in time is called the
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Assets & expenses – The group of accounts which you debit when increased are
Expenses incurred but not yet paid or recorded are called – B. Accrued expenses
Quick Ratio – Quick assets / Current Liabilities

Quick Assets: cash, short-term marketables, accounts rec.

Amnt of quick assets to quickly pay of liab

Losses – Decreases in equity (net assets) from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period except those that result from expenses or distributions to owners.

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