Accounting Chapter 9 Vocabulary

Salary Basis – A method of paying employees according to an agreed-upon amount for each week or month.
Owners Equity – the owner's claims to the assets of the business.
International Accounting Standards Board (IASB) – Group that identifies preferred accounting practices and encourages global acceptance; issues International Financial Reporting Standard (IFRS). (p.10)
Inventory Errors – Errors in the amount of ending inventory have a direct dollar for dollar effect on cost of goods sold and net income
external transactions – exchanges of value between 2 entities
Normal Side Balance for Liabilities – Cr
In a perpetual inventory system, which of the following would be debited when goods are purchased with the intent of being resold?
A. Cost of Goods Sold.
B. Inventory.
C. Purchases.
D. Accounts Payable. – B
The ___________ is a small patch of epithelium found on the roof of the nasal cavity that contains specialized neurons known as olfactory cells responsible for the sense of smell.
IASB – International Accounting Standards Board
Closing Entries – Journal entries that transfer the results of operations (net income or net loss) to owner's equity and reduce the revenue, expense, and drawing account balances to zero.
1. Close revenue accounts and cost of goods sold accounts with credit balances to Income Summary.
2. Close expense accounts and cost of goods sold accounts with debit balances to Income Summary.
3. Close Income Summary, which now reflects the net income or loss for the period, to owner's capital.
4. Close the drawing account to owner's capital.
True – When items are bought and paid for later this is referred to as buying on account
double declining balance – common depreciation rate for declining balance method is double the straight line rate
Debit – Recorded on the left side; an entry that increases asset and expense accounts, and decreases liability, revenue, and most equity accounts; abbreviated Dr. (p46)
Cash – Cash
Asset
Balance Sheet
Debit
The ___________ is а smаll pаtch оf epithelium fоund оn the roof of the nasal cavity that contains specialized neurons known as olfactory cells responsible for the sense of smell.
aging of accounts receivable – classifies all receivables by their due date
cash flow – cash receipts or disbursements of an entity

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