Ch4 The Accounting Cycle

Payables are classified as – liabilities
matching principle – record expenses incurred to generate revenue reported; principle
disposal (sale or abandonment) of plant assets Journal Entry Steps – -depreciation up to date:
Depreciation Expense
Accumulated Depreciation
-remove old asset at cost -> credit
-remove old asset's accumulated depreciation-> debit
-record cash received (if any) -> debit
-balance entry – debit(loss), credit(gain)
Liabilities – creditors claims against resources, things we owe
Owner's Equity – The amount remaining after the value of all liabilities is subtracted from the value of all assets
market to book ratio (price to book ratio) – market price of per share / book value per share
Net working capital – Current assets – Current liablities
Profitability – The ability to earn enough income to attract and hold investment capital.
Workforce redeployment applies the ________ principles used to optimize inventory management, planning, and production to optimize the utilization of a firm's employees.
Net Loss – EXPENSES Greater than REVENUE = NET LOSS
long-term liabilities – Obligations a company expects to pay after one year.
Wоrkfоrce redeplоyment аpplies the ________ principles used to optimize inventory mаnаgement, planning, and production to optimize the utilization of a firm's employees.
Cost Principle – The cost principle states that the accounting for purchases must be at their cost price.
withdrawals – Assets taken out of a business for the owners personal use
Double Entry System – A system of accounting in which every transaction affects at least two accounts.
annuity – series of equal periodic payments or receipts

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