Century 21 Accounting Chapter 3

Perpetual Inventory System: inventory system continually updates accounting records for merchandise transactions for the amounts of inventory available for sale and inventory sold. – e.
Liabilities. – Any debts that a business owes.
net income or net profit – the amount by which revenues exceed expenses
bonds – taking a load from the public; city, people, government
Cost Accounting – Records all the costs that occur within a business, used to improve management
retailers – Merchandising companies that purchase and sell directly to consumers
Monitoring, in terms of the components of internal control… – Monitoring enables the company to evaluate the effectiveness of its system of internal control over time. pp 9
Prepaid Expenses – Expenses that are paid for and recorded before they are used, such as rent or insurance.
Adjusting Entries – A journal entries made to update accounts for items that were not recorded during the accounting period.
Current assets / Current liabilities – = Current ratio
According to House, the following is not one of the specific types of behaviors commonly exhibited by charismatic leaders:
capital – money invested into the business
Loan – Something a bussines loans from a bank that has to be paid back
Return on Assets – (Net Income + Interest Expense + Income Tax Expense)/ (Beginning Total Assets)
Accоrding tо Hоuse, the following is not one of the specific types of behаviors commonly exhibited by chаrismаtic leaders:
The difference between net sales and cost of goods sold – Gross margin
Monetary Measurement Concept – All transactions for a business are measure in NZ dollar terms. Therefore if a transaction cannot be expressed in money values, it will not be reported in the financial statements.

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