Accounting Quiz 3 Laurie Wood

matching principle – record expenses incurred to generate revenue reported; principle
Which of the following represents the difference between the total assets and the total liabilities? – Owner's equity, Net worth, and Capital
If a company plans to raise the selling price of its product, which of the following would be affected by this decision? (Assume that the price change will have no effect on the projected sales quantity.)
a.
Cash budget
b.
Projected income statement
c.
Purchases budget
d.
All of the above
e.
a and b above – e.
a and b above
cash basis accounting – Revenues are recognized only when cash is received.
Expenses are recognized only when cash is paid.
23.OFHEO – Office of Federal Housing Enterprise-the federal regulatory body that oversees the government-sponsored entities (GSEs), Freddie Mac and Fannie Mae. Agency charged with ensuring capital adequacy, a ratio of a bank's capital to its risk, and financial safety and soundness of Fannie Mae and Freddie Mac.
Ethics – Codes of conduct by which actions are judged as right or wrong, fair or unfair, honest or dishonest. (p.9)
Steps for closing – service revenue
Income summary
Income Summary
Expenses
Income Summary —– 1st serv. rev – Expenses
retained earnings
retained earnings
dividends
Change in fair market value at 6/30 for investment income (could cause a negative interest income amount) – DR Interest income
CR Investment income
intangible assets with a definite life decrease over the time the asset is used – …
Dividends – Payments of cash from a corporation to its stockholders
The vast majority of stars in a newly formed star cluster are ________.
Accounting – the process of identifying, measuring and communicating economic information about tan organization for the purpose of making decisions or informed judgment.
High Operating Leverage – -capital intensive
-high FC, low VC
-high CM ratio
-Income is more sensitive to changes in sales volume
prepaid rent – current asset, BS, debit
EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization
The vаst mаjоrity оf stаrs in a newly fоrmed star cluster are ________.
Matching – Expenses are recorded in same period as revenues they generate to ensure accurate computation of net income

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