Financial Accounting Ch 7

Voucher system – A network of approvals by authorized individuals, acting independently, to ensure that all disbursements by check are proper.
Accounts Receivable – represents the amount of cash the company expects to collect in the future
Sales returns and allowances – Transactions in which the seller either accepts goods back from the purchaser (a return) or grants a reduction in the purchase price (an allowance) so that the buyer will keep the goods.
Statement of Owner's Equity/Statement of Net Worth. – A formal financial statement which summarizes all of the changes in owner's equity during a specified period of time.
unearned revenue – liability created when customers pay in advance or products or services; earned when the product or services are later delivered
previsiones para juicios y contingencias – allowances for litigation and contingencies
accumulated depreciation – accumulates the total depreciation expense taken on long-lived assets
Purchase Order. – A written order by a buyer for merchandise or other property specified in the purchase requisition.
FOB shipping point – Freight terms indicating that the seller places goods free on board the carrier, and the buyer pays the freight costs.
Studies indicate that religious conservatism tends to correlate with social and political conservatism.
Accounts Receivable – …Is a Debit balance account.
The principles of right and wrong that guide an individual in making decisions – Ethics
Studies indicаte thаt religiоus cоnservаtism tends tо correlate with social and political conservatism.
Assets – Property owned by a business.
A financial statement that reports assets,liabilities, and owner's equity on a specific date. – Balance Sheet
Other revenues and expenses – NOT day to day business
ie: Interest expense, gains or losses, rent income, interest income, dividend income
Multi Step Income Statement – reports earning from selling goods only (gross profit) and expenses required to operate the primary day to day business (operating expenses). Items not day to day are reported below operating income.
= Gross Profit
– Operating Expenses:
general and admin
selling and marketing
=Operating Income
+- Other Revenue and Expenses:
interest income or expense
rent income
gains or losses on sale of assets or unusual events
= Income Before Taxes:
-Income Tax Expense
= Income from Continuing Operations
+- Gain or Loss on Extrordinary Items
+- Gain or Loss on Discontinued Operations
= Net Income

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