Accounting General Journal, 9e: Chapter 01

limited liability – Generally when liability is limited to the amount invested in a business; protects personal assets from the firm's creditors
Unit-level cost drivers are most appropriate as an overhead assignment base when:
a. several complex products are manufactured
b. only one product is manufactured
c. direct labor costs are low
d. factories produce a varied mix of products – b. only one product is manufactured
Descending Order Of Liquidity – Assets that are arranged from the most liquid asset to the least liquid assets.
what is the (IASB) and what do they do? – International accounting standards board
issues international standards that identify preferred accounting practices in other countries
profitability – measures income/success over given time
Product Cost(Manufacturing) – All costs involving in making or acquiring a product or performing a service
Optional deductions include – health insurance, dental, retirement plan
Interpretive rules simply declare policy and do not affect legal rights or obligations.
Sales Discounts – Offered by the seller for prompt payment.
Insurance Policy – A contract between an insurance company and the party insured
A cash sale is a sale in which a credit card is used for the total amount of the sale at the time of the transaction. – False
Interpretive rules simply declаre pоlicy аnd dо nоt аffect legal rights or obligations.
future value – value at a later date of a single sum that is invested at compound interest
A company records each reconciling item used to determine the adjusted cash balance per books.
A. True
B. False – TRUE
Sales Revenue – Primary source of revenue for a merchandising company.
single step income statement – an income statement in which all expenses are added together and subtracted from all revenues

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