Century 21 Accounting Chapter 1

capital – money invested into the business
How is depreciation calculated using the straight-line method? – (Cost – Salvageable Value) / Useful Life
Gross Profit on Sales – The revenue remaining after cost of merchandise sold has been deducted.
Comparability – Financial statements must be comparable between different companies and time periods
REVENUE RECOGNITION PRINCIPLE – THE BASIS FOR RECORDING REVENUES: TELLS ACCOUNTANTS WHEN TO RECORD REVENUE AND THE AMOUNT OF REVENUE TO RECORD
Review and supervise changes to the accounting and related data – Просматривать и следить за изменениями в бухгалтерском учете и связанной с этим информацией
17.An offshore bank – is a bank located outside the country of residence of the depositor, typically in a low tax jurisdiction (or tax haven) that provides financial and legal advantages.
Special amount column – a journal amount column headed with an account title
An employer who discovers an employee's misconduct after discharging the employee may have a good defense to an employment discrimination suit.
What are two reasons a corporation would want to issue stock dividends? – Satisfy stockholders and increase marketability
Transfer of capital asset from GF to WF – DR asset
CR capital contribution
(GJ only in WF)
An emplоyer whо discоvers аn employee's misconduct аfter dischаrging the employee may have a good defense to an employment discrimination suit.
Budget – An estimate of revenue & probable expense for a given period of time is a
Temporary (nominal) accounts – Accounts that relate only to a given accounting period. Consist of all income statement accounts and the dividends account. All temporary accounts are closed at end of the accounting period.
An entry on the credit side of a liability account indicates that the account has been – Increased
General ledger – is the collection of all the ledgers, each showing the current balance of an account after various transactions, the P.R. (page recorded on the General Journal: J1) and the whether the account is a debit or credit.
Double-entry accounting – the recording of debit and credit parts of a transaction

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