Ch 5 Accounting For Merchandising Operations

3 types of receivables – accounts, notes, other
closing entries – entries made at the end of each reporting period to transfer the balances of the temporary owner's equity accounts to the permanent owner's equity account and to reduce the balance in the temporary owner's equity accounts to zero in preparation for the next accounting period
Cash Bases Accounting – revenue when cash comes in and expense when cash goes out.
Asset, Balance Sheet, Debit, Permanent – Investments
postdated check – A check with a future date on it
Internal users – Persons using accounting information who are directly involved in managing the organization
What risks are associated with the financial accounting records – errors in recording and updating the financial accounting records, unauthorized access to the accounting information, loss of destruction of accounting data
In paragraph five, what type of support is offered for the author’s claim in sentence 16?
profit – the amount of money earnedover and above the amount spent to keep the business operating.
Special Journal. – A special journal designed to accumulate data about only one kind of business transaction.
Effective planning of fixed overhead costs includes all of the following EXCEPT:
a. planning day-to-day operational decisions
b. eliminating nonvalue-added costs
c. planning to be efficient
d. choosing the appropriate level of capacity – a. planning day-to-day operational decisions
In pаrаgrаph five, what type оf suppоrt is оffered for the author’s claim in sentence 16?
Transaction Analysis – Every transaction affects at least two accounts (dual effect), and the accounting equation MUST remain in balance after each transaction.
explain the accounting process – to MEASURE economic activity and COMMUNICATE it
1. identify relevant economic activity
2. quantify these activites
3. record the results
journalizing transactions includes what? – 1) date of transaction
2) titles of effected accounts
3) dollar amounts of each debit and credit
4) explanation of each transaction
Post-Closing trial balance – A trial balance prepared after the closing entries are posted

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