Accounting Chapter 6

TEST!! Free cash flow – Operating cash flow + investing cash flow
credit memorandum – Source document prepared by the vendor showing the amount deducted for returns and allowances
Credit – An entry recording a sum received, listed on the right-hand side or column of an account.
Owners equity – The amount remaining after the value of all liabilities is subtracted from the value of assets
Accounting entity – The financial transactions of the business are kept separate from the personal transactions of the owner. This means that only the business assets and liabilities are recorded in the balance sheet, and only business income asks expenses are recorded in the business income statement
Accounts receivable – Счета к получению
A(n) ________ measures company progress by comparing actual performance to planned performance.
Gross Profit Percentage – The amount of gross profit from each dollar of sales (gross profit percentage = gross profit/net sales).
Depreciable Base – Cost minus Salvage Value.
posting – the process of transferring amounts from the journal to the ledger accounts.
Transaction – Activity that changes assets, liabilities, or owner's equity
A(n) ________ meаsures cоmpаny prоgress by cоmpаring actual performance to planned performance.
ENTERPRISE RISK MANAGEMENT – A PROCESS USED BY A COMPANY TO PROACTIVELY IDENTIFY AND MANAGE THOSE RISKS THAT ARE INHERENT IN EVERY BUSINESS DECISION OR STRATEGY
straight foward – direct approach to a problem
qualities of used information – relevance, faithful representation, comparability, consistency
Temporary vs. Permanent Accounts – Temp: Expenses, Revenues, Dividends
Permanent: Assets, Liabilities, S.E.
POST-CLOSING TRIAL BALANCE – LIST OF THE ACCOUNTS AND THEIR BALANCES AT THE END OF THE PERIOD, AFTER JOURNALIZING AND POSTING THE CLOSING ENTRIES. THIS LAST STEP OF THE ACCOUNTING CYCLE ENSURES THAT THE LEDGER IS IN BALANCE TO START THE NEXT ACCOUNTING PERIOD. IT SHOULD INCLUDE ONLY BALANCE SHEET ACCOUNTS

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