Accounting Unit 1

geologist – one who studies rocks and soil
What classification of ratios measure the overall performance of the firm relative to revenues, assets, equity, and capital? – Profitability Ratios
Asset Turnover – Net Sales/Ave. Total Assets
Plant assets – Tangible long-lived assets used to produce or sell products and services.
auditor – A person who formally examines and verifies financial accounts
Atlantis Company's ending inventory is understated $4,000. The effects of this error on the current year's cost of goods sold and net income, respectively, are
A. understated, overstated.
B. overstated, understated.
C. overstated, overstated.
D. understated, understated. – B
The study of the body's organization by areas is
Simple Rate of Return Formula – (Annual Net Cash Flows – Annual Depreciation**) / Initial Investment = Simple Rate of Return %

** Cost – Residual Value / Useful Life

labour charges – Arbeitskosten
Relevance – to be useful, information must be relevant
-capacity to effect a decision
Economic Equity – each owner has its own books, records, financial statements that are seperate.
time period assumtion – The entity's activities are separated into periods of time such as months, quarters or years.
TEST!! Separation of duties – Authorization, custody of assets, record keeping
accounting equation – an equation showing the relationship among assets, liabilities, and owner's equity.
The study оf the bоdy's оrgаnizаtion by аreas is
True – A creditor would favor a positive net worth
sole proprietorship – is a business owned by one person.
periodicity assumption – an assumption that the economic life of a business can be divided into artificial time periods
provisión por gratificaciones – provision for bonuses
full disclosure principle – Requires that companies disclose all circumstances and events that would make a difference to financial statement users.

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply