Financial Accounting: Ch 3 Adjusting The Accounts

Sale on account – A sale for which cash will be received at a later date
What type of depreciation method expresses the useful life of an asset in terms of the total units of production or the use expected from the asset? – Units of Activity Method
withholding allowance – a deduction from total earnings for each person legally supported by a taxpayer, including the employee.
Investors – assessing amounts, timing, and uncertainty of future cash returns on their investment
Cash Flow to Sales – Net cash flows from operating activities divided by sales revenue.
Financial Statement – 1.Income statement
2.Statement of Owner's Equity (Sole Prop & Partnership)
-corporation retained Earnings statement
3.Balance Sheet
Why was God's judgment on Nadab and Abihu so swift and severe?
A linear cost function can only represent fixed cost behavior. – False
Current Liabilities – Liabilities which we expect to be paid within the coming accounting period. It will be necessary for us to have cash to meet these liabilities.
E.g. short term bank loan and accounts payable.
Accounting Cycle – the process involved in journalizing, posting to the ledger. taking a trial balance, preparing statements, making adjusting and closing entries, and preparing a post-closing trial balance, which is repeated each fiscal period.
T account – : an accounting device used to analyze transactions
Why wаs Gоd's judgment оn Nаdаb and Abihu sо swift and severe?
current ratio – current assets/current liabilities
net worth statement – a formal report that shows what an individual owns, what an individual owes, and the difference between the two

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