College Accounting Chapters 14

Assets & expenses – The group of accounts which you debit when increased are
Realization of revenue – Revenue is recorded at the time goods or services are sold
Revenue Recognition Principle – Companies recognize revenue in the accounting period in which it is earned.
In a service enterprise, revenue is considered to be earned at the time the service is performed.
Decreased – an entry made on the debit side of the proprietorship account indicates that the account has been
materiality – judgment on weather an items size makes a difference
impuesto a los bienes personales – tax on personal assets
Long term – More than one year to pay
business entity principle – An accounting principle that requires a business maintain its own set of records and accounts that are separate from other financial interests of its owners
Naper Publishing required warehousing and shipping services for its books, so it hired Independent Publishing Group to provide the services. This is an example of ________.
Payroll – The total amount earned by all employees for a pay period
The long-range plan established the major activities that will have to be carried out over the next _______ to ______ years to achieve the organizations goals. – 3 to 5
Tangible asset – Goodwill is classified as a
Net sales – The difference between total sales & sales returns & allowances is
Contributed Capital – the result of owners providing to the businesses cash
Service-sector companies report:
a. only merchandise inventory
b. only finished goods inventory
c. direct materials inventory, work-in-process inventory, and finished goods inventory accounts
d. no inventory accounts – d. no inventory accounts
revenue recognition principle – Dictates that revenue be recongnized in the accounting period in which it is earned
Nаper Publishing required wаrehоusing аnd shipping services fоr its bоoks, so it hired Independent Publishing Group to provide the services. This is an example of ________.
Restricting further transfer of a check's ownership – Restrictive endorsement
income statement – presents a summary of a business entity's revenues and expenses during a time period
Current Ratio – Current assets divided by current liabilities
audit – examination of accounts of a business; official examination
3. Revenues represent
1. the cash collected from customers during the year of the income statement
2. the cash collected from sales made during the year of the income statement
3. the sum of the selling prices of all the goods sold to the customers during the year of the income statement
4. the sum of the costs of all the goods sold to the customers during the year of the income statement – 3. the sum of the selling prices of all the goods sold to the customers during the year of the income statement

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