Century 21 Accounting Chapter 1

Accounts often need to be adjusted because – B. many transactions affect more than one time period
FOB destination – situation in which the buyer takes ownership (title) at the delivery destination point and the seller pays the freight
Simple entry – a journal entry that involves only two accounts
Business entity – Applied when a business's financial information is recorded and reported separately from the owner's personal financial information
payment date – date dividend will be distributed to the Stockholders of record
Ledger – The book that contains the entire group of accounts a business has
Direct Method – Format directly states the amount of cash that is collected and the amount of cash that is paid for specific items during the period. Everything from Investing down is the same as Indirect Method.
THE DIRECT METHOD IS FAVORED BY FASB AND IASB. Very few companies use direct method.
Direct Labor cost – use employees to convert materials into finished goods products.
investee – متلقي الاستثمار
What is a asset? – An asset is a resource controlled by the entity from which economic benefits are expected.
Acute stress is _____ in onset and _____ in duration.
Natural resources – Assets physically consumed when used; examples are timber, mineral deposits, and oil and gas fields.
net loss – the difference between gross profit and expenses when expense is larger
horizontal analysis – amount of item on current financial statement compared w/ same item on other statement
What type of liability does notes payable fall under ? – Current liabilities
Calculate the age of accounts receivable: – Average accounts receivable x 365 divided by credit sales x 1.15 = days
Costs of Goods Sold – The cost to the business of the inventories it has sold.
revenue – an increase in owner's equity resulting from the operation of a business.
Acute stress is _____ in оnset аnd _____ in durаtiоn.
External users – not directly involved in running the organization . .. shareholders, lenders, directors, customers, suppliers, regulators, lawyers, brokers, and the press.
Account – Used for bookkeeping to record increases and decreases of business transactions

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