Basic Accounting Math

What is the Cost principle? – An accounting principle that states that companies should record assets at their cost.
Ledger – A book of accounts,a complete set of accounts used by a business.
The components of a retained earnings sheet – Beginning retained earnings + Net Income – Dividends Paid = Ending Retained Earnings
contra revenue account – an account that is offset against a revenue account on the income statement
Other Long Term Assets – assets held for more than one year that do not fit into other asset categories; ie long term assets that are not currently being used and the cash value of life insurance policies
capital – another word for owners equity of a business.
Purchase on Account- – a transaction in which the merchandise purchased is to be paid for later.
purchase returns and allowances – a way money can come back to a business
________ are used to image bones and internal organs.
business entity assumption – Principle that requires a business to be accounted for separately from its owner(s) and from any other entity.
debit card – a bank card that automatically deducts the amount of the purchase from the checking account of the cardholder
Under what circumstances would a company have a net loss – When Expenses > Revenues
________ аre used tо imаge bоnes аnd internal оrgans.
ACCRUED LIABILITY – A LIABILITY FOR WHICH THE BUSINESS KNOWS THE AMOUNT OWED BUT THE BILL HAS NOT BEEN PAID
A liability – A probable future sacrifice of economic benefits of the entity arising from present obligations

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