C4 Classify Accounts

accounts receivable – an amount owed by a customer who has purchased the company's product or service
Finance Costs (eg's) – °Interest on loan
°Interest on mortgage
°Interest on bank overdraft
FOB destination – freight terms indicating that ownership of goods remains with the seller until the goods reach the buyer
Suppose a company purchased a piece of land in 2005 for $100,000. The actual market value of the land at that time was $90,000, so the company got a bargain!!! On December 31, 2007, the market value of the land was determined to be $120,000, but the city had the land appraised at $130,000 for property tax purposes. What amount should the company show for the land on its December 31, 2007 Balance Sheet?
a. $90,000
b. $100,000
c. $120,000
d. $130,000 – b. $100,000
Purchase invoice – A document that supports each credit purchase.
Balance column account – Account with debit and credit columns for recording entries and another column for showing the balance of the account after each entry. (p.80)
SFAC No.6 (repl. No.3) Elements of Financial Statements –
Proprietary perspective – Is perspective that financial reporting should be focused only on the needs of the shareholder.
In “A White Heron,” what does the stranger want/desire from Sylvia/Sylvia’s family?
GAAP and IFRS similarities and differences – pursuing convergence to minimize differences in principles
Expense Recognition / Matching principle – Expenses incurred by the business should be included regardless of when money is paid for them
Unearned rent revenue – Balance Sheet
Current Liab.
accrual method – record income when earned and expenses incurred
The difference between the two sides of an account is called the – Account balance
In “A White Herоn,” whаt dоes the strаnger wаnt/desire frоm Sylvia/Sylvia’s family?
profitable/growing business – positive cash flow from operating activities, negative cash flow from investing activities, and positive, negative, or neutral cash flow from financing activities
14. The operating cycle of a company is the
1. time it takes to use cash to develop a product or service and get it ready to sell
2. time it takes to use cash to develop a product or service, sell it, and collect from the customers
3. time it takes to develop a product or service and to sell it
4. period of time represented on the income statement and cash flow statement – 2. time it takes to use cash to develop a product or service, sell it, and collect from the customers
gross profit + cost of goods sold – net sales
4 types of adjusting entries – prepaid expenses
unearned revenues
accrued expenses
accrued revenues

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