Chapter 01 Fundamental Accounting Principles

Unearned rent revenue – Balance Sheet
Current Liab.
To Pay a Dividend, A company must: – – have enough retained earnings to declare the dividend
– have enough cash to pay the dividend
The board of directors has the ability to declare a dividend; becomes a liability once declared.
1) Debit retained earnings, credit dividends payable
2) Debit dividends payable, credit cash
Similarities between GAAP & IFRS – IFRS is based on the same four characteristics of information as stated in GAAP (relevance, reliability, understanding, and comparability) Also, the basic principles and assumptions of GAAP are aligned with those of IFRS.
Un-obligated balance – The portion of the funds authorized by the Federal awarding agency that has not been obligated by the recipient and is determined by deducting the cumulative obligations from the cumulative funds authorized.
tangible asset – tárgyi eszköz
ACCRUAL – THE CASH PAYMENT OCCURS AFTER AN EXPENSE IS RECORDED OR THE CASH IS RECEIVED AFTER THE REVENUE IS EARNED
Profitability – The ability to earn enough income to attract and hold investment capital.
financing activities – activities that obtain from investors and creditors the cash needed to launch and sustain a business; a section of the statement of cash flows.
Net Profit – The difference between net profit and expenses when net profit is larger.
Owners equity – The amount remaining after the value of all liabilities subtracted from the value of all asset
This was the nickname of the backing band at Stax Records in Memphis:
Cash+ Investments+Accts. Receivable/ Current Liabilities – Acid Test
Capital contribution – owner's equity. contribution from the beginning
Generally accepted accounting principles – derive their credibility and authority from general recognition and acceptance by the accounting profession.
Normal Side Balance for Assets – Dr
inversiones temporarias, anexo y nota – short-term investments, exhibit and note
withdrawals – assets taken out of a business for the owners personal use
This wаs the nicknаme оf the bаcking band at Stax Recоrds in Memphis:
gross profit equation – net sales – cost of merchandise sold = gross profit equation
depreciation – the allocation of the cost of a long-term tangible asset over its useful life
What is a liability? – A present obligation of the entity, the settlement of which is expected to result in an outflow of economic benefits
identification – التعريف ، التمييز
who gives you capital – investors, own pocket, loans

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