Accounting Chapter 6

Expanded Accounting Equation – Assets=Liabilities+Capital-Withdrawals+Revenue-Expenses
In a job-costing system, a manufacturing firm typically uses an indirect-cost rate to estimate the __________ allocated to a job.
a. direct materials
b. direct labor
c. manufacturing overhead costs
d. total costs – c. manufacturing overhead costs
Account payable ledger – A subsidiary ledger containing only accounts for vendors from whom items are purchased or bought on account.
Source Documents – information about business transactions is obtained from original business papers
long term liabilities – liabilities owed for more than a year
costs of goods sold equation – net sales-cost of goods sold=gross profit
If       A → B → C → D → E      represents a metabolic pathway, then letter E would be a(n)
net worth statement – A formal report that shows what an individual owns, what an individual owes, and the difference bewteen the two
IAS 7 Cash Flow Statements – * Requires a cash flow statement is included in the FS
* Compliments IS & BS – IS reports on financial performance, BS reports on financial position, CFS focuses on the changes in financial position
* OPERATING ACTIVITIES – main revenue-producting activities, interest & tax
* INVESTING ACTIVITIES – acquisition/disposal of NCA & other investments
* FINANCING ACTIVITIES – issue of new shares, payments to repay shares, changes in LT borrowing, dividends
Liabilities – Probably future obligations to pay assets. A company's debt.
If       A → B → C → D → E      represents а metаbоlic pаthway, then letter E wоuld be a(n)
Warranty – Legal obligation to fix a defective product
average cost – computer for all inventory available for sale during the period

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