Learn Accounting Basics 1

1. simple to purchase 2. easy transfer of ownership 3. limited liability for stockholders – Why is corporation popular?
Investing – Getting equipment. Assets
uncollectible accounts expense – bad debts expense
Check – A business form ordering a bank to pay cash from a bank account
MONETARY UNIT ASSUMPTION – An assumption that requires that only those things that can be expressed in money are included in the accounting records.
Income Statement – A Financial Statement showing revenue and expenses for a fiscal period
Prepaid expenses – Assets that result from the payment of expenses that benefit more than one accounting period.
The amount of revenue from the sale of funeral services would be shown on the – Profit and Lose Statement
Algal blooms are the direct result of __________, which is the addition of organic matter like phosphorus and nitrogen to the aquatic environment with a corresponding drop in Oxygen levels.
Expenses – Represent the dollar amount of resources the entity used to earn revenue during the period.
materiality constraint – prescribes that only info that would influence the decision of a reasonable person need be disclosed
Accounts Payable – Money the Company Owes
Liabilities
Balance Sheet
Credit
Owner's Equity – Amount remaining after the value of all liabilities is subtracted from the value of all assets
Algаl blооms аre the direct result оf __________, which is the аddition of organic matter like phosphorus and nitrogen to the aquatic environment with a corresponding drop in Oxygen levels.
service business – a business that preforms an activity for a fee.
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
Debtors – Individuals or organizations that owe money.
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
Accounting Systems – The system of records a business keeps to maintain its accounting system. Ex. income statement, balance sheet

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