Century 21 Accounting Chapter 6

Credit – An amount entered on the right side of an account.
A double line under the entry on a T-account means – The entry is complete
Total Asset Ratio – Comparison of total assets with total
cost cutting measures – kostensenkende Maßnahmen
account title – provides a description of the particular type of asset, liability,o/e,revenue,expense
expense recognition principle – Prescribes that a company record the expenses it incurred to generate the revenue reported
outstanding deposits – deposits made and recorded in the checkbook but do not appear on the bank statement
Dalian Company provides the following information: Price per unit: $20 Variable cost per unit: $8 Fixed costs per month: $15,000How much is the contribution margin ratio?
Inventory Turnover – (Current Year COGS)/((BI + EI)/2)
*Important to turn over at a reasonable rate
365/Inventory Turnover gives how many days for turnover
consistency – the quality of accounting information that allows a user to compare two or more accounting periods for a single company
Выпущенные долговые ценные бумаги – Debt securities in issue
Owner's Equity – Owner's Equity is the residual interest in the assets of the entity after deducting all its liabilities.
A=L+OE or OE=A-L
Dаliаn Cоmpаny prоvides the fоllowing information: Price per unit: $20 Variable cost per unit: $8 Fixed costs per month: $15,000How much is the contribution margin ratio?
Component percentage – The percentage relationship between one financial statement item and the total that includes that item
cost flow for a time period – beginning inventory + net purchases = merchandise available for sale
end inventory + cost of goods sold = the same thing
Operating Expenses – directly related to primary day to day business operations
selling n marketing
general and admin
accounting system – a planned process for providing financial info that will be useful to management.
Journal entry of unearned revenue – dr:cash
cr: unearned revenue
dr: unearned revenue
cr: revenue

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