Intro To Accounting 20653 Exam 4 Laurie Wood Tcu

accounting record – organiized summaries of a buisness's financial activities
What are the five components of internal control? – The five compnentts of internal control, as discussed in Internal Control-Integrated Framework (Committee of Sponsoring Organizations of the Treadway Commission), are
1. the control enviornment,
2. risk assessment,
3. control activites,
4. information and communication, and
5. monitoring. pp 8
financial accounting – the type of accounting that focuses on the reporting on information to external users
gross profit margin – =gross profit/sales
Statement Of Cash flows – Reports on a business's cash receipts and cash payments for a specific period
Formula for accounting – Assets=liabilities + owner's equity
Direct Materials – materials that become an integral part of finished product and whose costs can be conveniently traced to the finished product.
When the current replacement cost of inventory is less than its cost, it is written down to
A. FIFO value.
B. LIFO value.
C. market value.
D. average-cost value. – C
Consider this Graph:  Above is a graph of the annual costs of two companies which is plotted against the number of products produced annually by each company. The breakeven point for the two companies occurs at a production rate of how many products annually?
fundamental accounting equation – Assets=liabilities+owners equity, an equation expressing the relationship of assets, liabilities, and owners equity.
bank statement reconciliation – the process by which the depositor verifies agreement between his checkbook balance and the bank statement balance
Assets – anything of material value or usefulness
net income – The difference between total revenue and total expenses when total revenue is greater
Cоnsider this Grаph:  Abоve is а grаph оf the annual costs of two companies which is plotted against the number of products produced annually by each company. The breakeven point for the two companies occurs at a production rate of how many products annually?
Verifiability – realiability independent observers could reach consensus
Preferred stock – Gives its owners certain advantages over common stockholders. They receive dividends before the common stockholders and they also receive assets before the common stockholders if the corporation liquidates. This type of stock is rare

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