Chapter 1 Introduction To Accounting

Book value – Asset's acquisition costs less its accumulated depreciation; also sometimes used synonymously as the carrying value of an account
Merchandisers – who generally has a longer business cycle
Balance Sheet – Reports assets, liabilities, and stockholders' equity.
franchise & licenses – rights that a company or governement grants and entity to deliver a product or service under specified conditions
List 6 Enhancing Characteristics – Comparability
Consistency
Verifiability
Timeliness
Understandability
Cost-benefit
Equity Method – Is used when an investor can exert significant influence over an affiliated; the method permits recording the investor's share of the affiliate's income.
Drawer. – A person (depositor) who signs a check, ordering a payment to be made.
Time period – Regular reports of financial progress to make changes in business plans and operations
Thailand has 2.8% inflation while China has 3.4% inflation in period 1. If the original spot exchange rate was 5.25 Baht per Yuan, the relative PPP exchange rate will change to ______ Baht per Yuan. (**round to 2 digits behind the decimal)
What type of liability does interest rates fall under? – Current Liabilities
Financial Statements – Documents companies use to report results of activities…
Management accountants might provide information on decisions on whether to buy a product from outside or manufacture it in-house. – True
Periodic inventory system

Plus formula – computes figures from the physical count, at beginning and end of period.

The formula is:

Beginning + purchases inventory – ending inventory = cogs

Revenue Recognition Principle – The principle that companies recognize revenue in the accounting period in which it is earned.
Thаilаnd hаs 2.8% inflatiоn while China has 3.4% inflatiоn in periоd 1. If the original spot exchange rate was 5.25 Baht per Yuan, the relative PPP exchange rate will change to ______ Baht per Yuan. (**round to 2 digits behind the decimal)
internal transactions are what? – exchanges within any entity

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