Basic Accounting Math

average cost – computer for all inventory available for sale during the period
Ledger – a book or file containing a separate page for each business account; serves as a permanent record of financial transactions.
closing entries – entries at the end of an accounting period to transfer the balances of temporary accounts to a permanent stockholders' equity account, Retained Earnings
Direct Labor – Labor costs that can easily be traced to a product
Transaction – A business activity that changes assets, liabilities, or owner's equity
Qualitative – The nature or characteristics of information
Asset – •Past transaction
•Present control
•Future economic benefit
accountant – Buchhalter
Wirtschaftsprüfer
4 Example of Adjustments – Examples of adjustments include recognition of unearned revenue, recognition of prepaid, expenses, accrual of interest expense and depreciation.
Debt to Total Assets Ratio – (total liabilities/ total assets) x 100 = %
lower percentage = more solvent
How would a company's working capital be affected if a substantial amount of accounts payable were paid in cash?
When spoiled goods have a disposal value, the net cost of the spoilage is computed by:
a. deducting disposal value from the costs of the spoiled goods accumulated to the inspection point
b. adding the costs to complete a salable product to the costs accumulated to the inspection point
c. calculating the costs incurred to the inspection point
d. None of these answers is correct. – a. deducting disposal value from the costs of the spoiled goods accumulated to the inspection point
ethics – the principles of right and wrong that guide an individual in making decions.
Closing Process – Consists of journalizing and posting the closing entries to set the balances of the revenue, expense, and withdrawal accounts to zero for the next period. A step in the accounting cycle that occurs at the end of the period.
list 3 paragraphs in the standard clean opinion report – intro
scope
opinion
statement of retained earning – reports information about how retained earning change over a reporting period.
this represents a "bad" cheque – NSF cheque
Bonds Issued at a Premium (Stated Rate 12% > Market Rate 10%) – Cash [debit to an Asset Account on Balance Sheet]

Premium on B/P [credit to a Liability Account on Balance Sheet] Bonds Payable [credit to a Liability Account on Balance Sheet]

Hоw wоuld а cоmpаny's working cаpital be affected if a substantial amount of accounts payable were paid in cash?
goodwill – the amount that is paid when acquiring a company that is greater than the fair market value of net assets required
markup – The amount added to the cost of merchandise to establish the selling price.

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