Century 21 Accounting Chapter 3

limited liability – stockholders in corporation can lose no more than the amount hey invested in the company
Periodic expense – costs that are billed by time period, regardless of the level of revenue. rent, salaries, insurance premiums, interest expense
Share of Stock – Each unit of ownership in a corporation.
Ramos, Inc. has monthly revenues of $30,000 and monthly expenses of $18,000, and the company paid $4,000 in dividends; therefore, net income for the month is $12,000. – True
Expanded Accounting Equation –
Additional Problem # 6. Total current liabilities at December 31, 2001 – accounts payable + salaries payable + income tax payables, basically add all payables
What accounts are extended to the income statement ? – Expense accounts and revenue accounts
payment date – date dividend will be distributed to the Stockholders of record
Which part of the life cycle does a pollen grain represent?
If a funeral director receives payment from a client who purchased a service on a 30 day account, he would make which of the following entries in his journal – Debit cash, credit accounts receivable
operating activities – the cash receipts and cash payments necessary to operate a business on a day to day basis
Liquidity Ratios – Measure the ability of a company to pay obligations expected to become due within next year or operating cycle
additional paid-in capital – the excess of amounts paid in over the par or stated value
list 3 methods for valuing assets – history or acquisitions costs
future profits
replacement costs
tangible assets – have a physical presence
Which items would need to be recorded in Fred's Supply accounting records – Both NSF check and bank service fee
Which pаrt оf the life cycle dоes а pоllen grаin represent?
temporary accounts – are kept for each period and then transfer the balances of revenues, expenses and dividends to the retained earnings account.
82. The International Accounting Standards Board:
A. Is governed by the U.S. Securities and Exchange Commission.
B. Can overrule the FASB when their policies disagree.
C. Promotes the use of high-quality, understandable global accounting standards.
D. Is the primary standard-setting body in the United States. – C. Promotes the use of high-quality, understandable global accounting standards.

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