Accounting Unit 1

PAMI – pensioners social welfare fund
Stock ledger – A file of stock records for all merchandise on hand
Compound Journal Entries – A journal entry that is characterized by having multiple debits and/or multiple credits.
FASB (Acronym) – Financial Accounting Standards Board
3 owners claims on assets – retained earnings
dividends
contributed capital
When a proprietor makes initial investment or subsequent investments in a business – Permanent capital
CONSERVATISM – Lower of cost or market is used to value inventories.
Debit memorandum – items the bank deducts from the account balance.
Accounting period – income is measured for a span of time
[ 18 ] The following information relates to a product produced by Faulkland Company:          Direct materials $ 11   Direct labor   8   Variable overhead   7   Fixed overhead   9   Unit cost $ 35   Fixed selling costs are $1,190,000 per year. Variable selling costs of $5 per unit sold are added to cover the transportation cost. Although production capacity is 690,000 units per year, Faulkland expects to produce only 590,000 units next year. The product normally sells for $40 each. A customer has offered to buy 79,000 units for $34 each. The customer will pay the transportation charge on the units purchased. If Faulkland accepts the special order, the effect on income would be a: $79,000 increase. $237,000 increase. $632,000 increase. $474,000 decrease.  
Straight Line Depreciation Method – There is an equal amount of depreciation assigned to each year or period
– Depreciable cost is divided by useful life in years to determine the annual depreciation expense
– Every year, the expense gets closed to retained earnings, while the accumulated depreciation continues to grow
Carryover – Unobligated Federal funds remaining at the end of any budget period that, with the approval of the GMO or under an automatic authority, may be carried forward to another budget period to cover allowable costs of that budget period (whether as an offset or additional authorization).
Stakeholders – any persons or groups who will be affected by an action
amortization – process by which the cost of an intangible asset is allocated to the acct. periods benefitted
[ 18 ] The fоllоwing infоrmаtion relаtes to а product produced by Faulkland Company:          Direct materials $ 11   Direct labor   8   Variable overhead   7   Fixed overhead   9   Unit cost $ 35   Fixed selling costs are $1,190,000 per year. Variable selling costs of $5 per unit sold are added to cover the transportation cost. Although production capacity is 690,000 units per year, Faulkland expects to produce only 590,000 units next year. The product normally sells for $40 each. A customer has offered to buy 79,000 units for $34 each. The customer will pay the transportation charge on the units purchased. If Faulkland accepts the special order, the effect on income would be a: $79,000 increase. $237,000 increase. $632,000 increase. $474,000 decrease.  
Closing Journal Entries – made at the end of each accounting period to transfer balances in temporary accounts to retained earnings and to establish a zero balance in each of the temporary accounts
Corporation – A legally created entity that is owned by one or more persons.
Equities – financial rights to the assets of a business

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