Accounting Chapter 9

Stable-monetary-unit assumption – The reason for ignoring the effect of inflation in the accounting records, based on the assumption that the dollar's purchasing power is relatively stable.
Dividend Yield and formula – Return on investments based on dividends.

Dividend Yield = Dividend per Share / Market Price per Share.

What programs are used to investigate a receivable on your AR list? Explain what these programs do. – • AA0090- Detail summary by contract
o 1 branch, 1 source #, 1 ticket
• AA0110- Customer # summary of all outstanding invoices by group
o 1 source #, whole group, all tickets
• AA0111- Customer # summary of all outstanding invoices by branch
o 1 branch, 1 source #, all tickets
merchandise inventory – goods that a company owns and expects to sell to customers
balance sheet – the statement that shows the financial position of a company as of certain date
Adjusting Journal Entries – record the effects of each periods adjustments in the debits-equal-credits format
Service business – A business that performs an activity for a fee
Markup – The amount added to the cost of merchandise to establish the selling price.
Quick Assets – cash, marketable securites & accounts receivable
What are some ways that HR can impact revenue?
gross profit rate – gross profit expressed as a percentage by dividing the amount of gross profit by net sales
Corporation – A business organised as a separate legal entity under state corporation law, having ownership divided into transferable shares of stock
Describe the concept of depreciation. – Depreciation takes a portion of the asset's cost and records it as an expense for each period you use the asset in order to account for the deterioration in the asset's value. This is in line with the matching principle and reports the depreciation expense in the same period as the revenue to which it is related.
Patents – intangible asset; new innovation. protect from imitators
Long-term debt – A liability that falls due beyond one year from the date of the financial statements.
Whаt аre sоme wаys that HR can impact revenue?
CONSERVATISM – No profits are anticipated and all possible losses are recognized.
The breakeven-point is the sales volume where:
a.
Variable costs equal variable revenues.
b.
Fixed costs equal total revenues.
c.
Total contribution margin equals fixed costs
d.
Total revenues equal variable costs. – c.
Total contribution margin equals fixed costs
Cash Receipts Journal. – A book of original entries in which only cash receipts are recorded.

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