Financial Accounting Ch 1 Dj

Cost – Sacrifice of an economic resource; typically accounted for and reported as an ASSET or EXPENSE
To determine its net income for an accounting period, a company computes and deducts the total expenses from the total revenues earned during the period – Matching Principle
management accounting – The branch of accounting that generates information for the internal decision makers of a business, such as top executives.
extraordinary repairs – expenditures extending the asset's useful life beyond its original estimate
Revenue – An increase in owners equity resulting from the operation of a business
Expenses – Decrease in retrained earnings that results from operations; the cost of doing business; opposite of revenues.
credit terms – Terms that set out the time allowed for payment for a sale on account.
The degree to which one should exercise to improve fitness makes a difference with the results.
Primary market – The market in which new issues of equity or debt take place
Net income – the final income measure after the provision for income taxes is subtracted from income before taxes
accounting – is the words and formats used to present information to others outside the business
Accounting Equation – Assets=Liabilities+Equity
net sales equation – sales – sales discounts – sales returns and allowances = net sales
Current liabilities – debts of a business that are generally paid within one year.
The degree tо which оne shоuld exercise to improve fitness mаkes а difference with the results.
current maturities of long-term debt – Balance Sheet
Current Liab.
what does an income statement show – A financial statement that measures a company's financial performance over a specific accounting period
Stockholders' equity – The combination of common stock and retained earnings accounts. Often referred to as the ownership claim of shareholders on total assets. It is to a corporation what owner's equity is to a proprietorship.
Accounts receivable is a/an – Asset account

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