Century 21 Accounting Chapter 1

Debt ratio formula and what it tests – Total liabilities/ total assets
Asses risk associated with a company
bull market – a market where stock prices are rising, favoring a bull
discounting – the process of finding the present value
Additional Problem # 3. Retained earnings at December 31, 2001 – retained earnings + net income minus dividends
Long-Term Liability – An obligation that will not be satisfied within one year. May include bonds, leases, deferred taxes, pensions, and mortgages.
Income Statement – A financial statement showing the revenue and expenses for a fiscal period.
Financing Activities – +Issuance of stock
+ Sale of treasury stock
– Purchase of treasury stock
+ Borrowing (issuance of notes or bonds payable)
– Payment of notes or bonds payable
– Payment of dividents
Computer Supplies – Normal Balance: Debit
Type of Account: Asset
Financial Statement: BS
accounts payable – current liab
which of the following is not an external user in accounting
a) lender
b) sales staff
c) shareholder
d) government – B) sales staff
Federal law permits a partnership to be treated as an entity in suits in federal courts.
#11. Which of the following accounts normally has a debit balance? – equipment
accounts payable ledger – a subsidiary ledger containing only account for vendors from whom merchandise or other items are purchase on account
Normal balance – Where we expect to find the balance – it's the increase side of the account
Declaration of Cash Dividend Effects – no effect on assets
increase liabilities
decrease stockholders' equity
Long term or long life assets used in continuing operations. Expected to be used by organization for more than a year – Property, plant, & equipment
What are assets that are held as long-term business investment? – Assets held as long-term investments, possibly available for sale e.g. investment properties, unused freehold land, long-term holdings in the shares and/or bonds or other companies.
assessments – amt. charged to property owners for IMPROVEMENTS such as sidewalks, new streets and sewers
Federаl lаw permits а partnership tо be treated as an entity in suits in federal cоurts.
income statement – rachunek zysków i strat usa
Revenue – An increase in owners equity resulting from the operation of the business
time/term of note – the period of time from the date of the note to the maturity date
accounting treatment for expenditures – depends on whether they are classified as capital expenditures, or expenses
Cash Equivalents – Are short-term investments with original maturities of three months or less that are readily convertible to cash and whose value is unlikely to change.

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