Weisinger Accounting Ch 5

T/F: Private board with the authority of GAAP is FASB. – T
Gross Profit Percentage. – Gross profit divided by net sales.
objectivity concept – concept of accounting that requires accounting records and the data reported in financial statements to be based on objective evidence
footing/pencil footing – a total, written in small pencil figures, under the last entry in a column of an account
A company's operating cycle is:
a.
An entire year
b.
The average time it takes for a business to sell its merchandise inventory
c.
The average time it takes for a company to buy inventory, sell it to customers, and to collect cash from customers
d.
The average time before a business must reorder inventory – c.
The average time it takes for a company to buy inventory, sell it to customers, and to collect cash from customers
comparability – the quality of accounting information that allows a user to analyze two or more companies and look for similarities and differences
Issued Stock – The number of shares the company has issued to its stockholders. It is a cumulative total from the company's beginning up through the current date minus any shares permanently retired
Receipt – Business form giving written acknowledgement for cash recieved
What are the 4 accounting assumptions? – 1. Separate entity
2. Continuity or "going concern"
3. Unit if measure
4. Time period
Explain debits and credits and their role in the accounting system. Include in your answer an explanation of the double-entry system. – c.
Group-order ranking requires the evaluation to place employees into a particular classification such as the “top 20 percent.”
Noncurrent liabilities – anything not current.
Perpetual Inventory System – An inventory system that keeps a running computerized record of merchandise inventory.
Account Balance – The Amount in an account
Stable-monetary-unit assumption – The reason for ignoring the effect of inflation in the accounting records, based on the assumption that the dollar's purchasing power is relatively stable.
Cost of… – (expects to.. x variable cost) +fixed cost of…
activities that create revenue and expenses are referred to as – operating activities
The accounting assumption that states that the business, rather than its owners, is the reporting unit is the:
A) historical cost assumption
B) stable-monetary- unit assumption
C) entity assumption
D) going concern assumption – C) entity assumption
Grоup-оrder rаnking requires the evаluаtiоn to place employees into a particular classification such as the “top 20 percent.”
Going Concern Assumption – The assumption that the company will continue in operation for the foreseeable future
purchased inventory – an asset

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