Financial Accounting Ch 6

decrease in OWC – =increase in operating cash flow
Cumulative Feature – A feature of preferred stock gives the stockholder the right to receive unpaid dividends from previous years before current year dividends are distributed to common stockholders.
Debtors – Individuals or organizations that owe money.
Source Document – The first record of a business transaction
Non-current Liabilities (eg's) – Loan
Mortgage
Not affected – when cash is spent in the acquisition of an asset the net worth of a business is
Endorsement – A signature or stamp on the back of a check transfering ownership
Нераспред прибыль – Retained earnings
CPA – Public accountant who has met certain educational & experience requirements & has passed an examination prepared by the American Institute Of Certified Public Accountants
Economic Entity Assumption – An assumption that economic activity can be identified with a particular unit of accountability, by keeping an enterprise's economic activity separate and distinct from that of its owners and any other business unit.

The entity assumption refers to economic, rather than legal, entities. Pg.56

An accounting information system (AIS) processes ________ to provide users with ________.
Process-costing journal entries and job-costing journal entries are similar with respect to direct materials and conversion costs. – True
Service Charge – A fee charged by a bank to cover the costs of maintaining accounts and providing services.
GAAP for accounting? – to provide information that is relevant, reliable, comparable
Accounting is a system for providing financial information. List 2 principle elements – -Financial Accounting
-Managerial Accounting
An аccоunting infоrmаtiоn system (AIS) processes ________ to provide users with ________.
Revenue – an increase in owners equity resulting from the operation of a business
Closing entries – Journal entries used to prepare temporary accounts for a new fiscal period
residual value – amt. expected upon disposal of the asset at the end of the service life
Management accounting – The area of accounting that refers to providing information to support internal management decisions.

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