Basic Accounting Terms

Australian Accounting Standards Board (AASB) – Sets accounting standards for all reporting entities in Australia
Cost (COGS) – A payment of cash or its equivalent for the purpose of generating revenues.
Security – Also known as collateral; an identified asset that can be claimed by the lender from a borrower who defaults on a loan.
Original cost – Первоначальная стоимость
Liability, Balance Sheet, Credit, Permanent – Utilities Payable
Three Ownership Structures – Sole proprietorship, Partnership and Corporation.
Merry Maid, Inc sells vacuum cleaners to McKenzie-Grace Corporation for $1,000. McKenzie-Grace pays Merry Maids with the company Visa card. Visa charges Merry Maids a 3% fee all Visa sales. What is the net effect of this transaction on the accounting equation for Merry Maids – Increase assets $970; increase retained earnings $970
In CVP analysis, an assumption is made that the total revenues are linear with respect to output units, but that total costs are non-linear with respect to output units. – False
A loan from a bank secured by property is – A mortgage payable
Transborder data flow
Activity Analysis. – Measures how efficiently a firm is utilizing its assets.
Costs of Goods Sold – 1. Expense
2. Income statement
3. Debit
4. Temporary
Cost of merchandise – the price a business pays for goods it purchases to sell
Trаnsbоrder dаtа flоw
normal cost of goods sold – the cost of goods sold before adjustment
for any overhead variance.
Cashflow- Investing – Purchase of PP&E
Comparability – Ability to compare the accounting information of different companies because they use the same accounting principles
Convertible Bonds – allows Bondholder (Individual) to "convert" bonds into common stock prior to maturity

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