Financial Accounting Ch 5

External Users – Creditors, Investors, Tax authorities
Last-in, first-out (LIFO) method – an inventory costing method that assumes that the latest unit purchased are the first to be sold
11. A company breaks even in all of the following cases except
1. Its total cost exactly equals its total revenues
2. Its net income is zero
3. Its total revenues exactly equal its fixed costs
4. Its total contribution margin exactly equals its fixed costs – 3. Its total revenues exactly equal its fixed costs
liabilities – the rights of creditors that represent debts of the business
trial balance – proof of the equality of debits and credits in a general ledger
T-account – A device that is used to demonstrate the impact of certain transactions and events.
Accounts Payable – amount owed to suppliers; Occurs when a company does not pay at the time the goods or services are received; an Invoice (BILL) and is generally owed in 30-60 days without interest
this account decreases when the company pays the supplier
Supplies – Supplies
Asset
Balance Sheet
Debit
Bob Dylan's decision to “go electric” alienated his original audience to the point that he was booed during this annual concert event in 1965.
Footing – The total of a column of numbers. (p.47)
Purchases returns and allowances – ?
The acronym REID is used when – Closing temporary accounts
account form – The form of balance sheet that resembles the basic format of the accounting equation, with assets on the left side and Liabilities and Stockholders' Equity sections on the right side.
The financial statement that reports revenues and expenses is called the
A) Balance sheet
B) Income statement
C) Statement of cash flows
D) Statement of retained earnings – B) Income statement
Bоb Dylаn's decisiоn tо “go electric” аlienаted his original audience to the point that he was booed during this annual concert event in 1965.
Managerial Accounting – the field of accounting that provided internal reports to help users make decisions about their companies
Reasons for high gross cost – • Fleet mix (too many SUVs)
• Inflation
• Depreciation

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