Ch 4 Completing The Accounting Cycle

capital structure – The mixture of liabilities and stockholders' equity in a business.; debt-to-assets ration is a good indicator
Full Disclosure Principle – Principle that prescribes financial statements (including notes) to report all relevant information about an entity's operations and financial condition.
sales return – merchandise that customers return to the seller after a sale
credit – Paid advertising expense: ________ cash
Days sales outstanding – 365/(Sales/Accounts Receivables)
$1100 – The beginning balance in the supplies account is $600. During the month an additional $800 worth of supplies were purchased. At the end of the month, an inventory of the supplies found that only $300 remained on hand. What would be the amount of the adjusting entry for the supplies account?
restrictive endorsement – An endorsement restricting further transfer of a check's ownership.
bear market – a market where stocks are falling
Cost Constraint (cost-benefit relationship) – An accounting constraint that requires that the costs of providing financial information be weighed against the benefits that can be derived from using it.

The constraint applies to informational requirements established by standard-setting bodies and governmental agencies as well as to companies reporting financial information. Pg.63

  This work is a graphite drawing.
The percentage-of-sales basis of estimating uncollectibles
A. produces a better estimate of cash realizable value.
B. results in a better matching of expenses with revenues.
C. emphasizes balance sheet relationships.
D. considers the existing balance in Allowance for Doubtful Accounts. – B
Calculating Revenue – Net income – Expenses
unit of measure concept – A concept of accounting requiring that economic data be recorded in dollars.
Oliveras Company had net credit sales during the year of $800,000 and cost of goods sold of $500,000. The balance in accounts receivable at the beginning of the year was $100,000, and the end of the year it was $150,000. What were the accounts receivable turnover ratio and the average collection period in days?
A. 4.0 and 91.3 days.
B. 5.3 and 68.9 days.
C. 6.4 and 57 days.
D. 8.0 and 45.6 days – C
Liabilities – Debts owed by a firm
Low current ratio – using resources efficiently
Decreased – an entry made on the debit side of the proprietorship account indicates that the account has been
  This wоrk is а grаphite drаwing.
Income and cash flow usually move: – Together bc net income eventually generates cash
internal controls – procedures to protect cash and other assets
dividend dates (3) – declaration
TEST!! Separation of duties – Authorization, custody of assets, record keeping
SOX is a result of what – enron

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