Chapter 01 Fundamental Accounting Principles

Account title – The name given to an account
The usual sequence of steps in the transaction recording process is: – B. Analyze, Journal, Ledger
Fiscal Period – The period for which an analysis of the operations of a business is made
Statement of Retained earnings – Total cumulative amount of reported net income less any net losses and dividends declared since the company started operating
Accounts Payable – 1. Liability
2. Balance Sheet
3. Credit
4. Permanent
Owner's Equity, Balance Sheet, Credit, Permanent – Paid in Capital in Excess of Par
Three ingredients of Relevance – Predictive Value
Confirmatory Value
Materiality
intereses, multas y recargos impositivos – interests, penalties and surcharges on taxes
annual fiscal statement – reports covering a one year period
DBMS is an acronym that stands for database management server.
External transactions – are exchange of values between two entities, which yield changes in the accounting equation.
Price-Earnings Ratio – = Market price of one share of common stock / Earnings per share of common stock
-Measures the worth of a share of common stock
correcting entry – a journal entry made to correct an error in a previous journal entry
Lower-of-Cost-or-Market – when a company has inventory which value can quickly change (technology or fashion) has to do with reevaluating inventory –> practice of conservatism
Account Number – the number assigned to an account
DBMS is аn аcrоnym thаt stands fоr database management server.
Revenues are recorded when:
A) work is begun on the job
B) cash is received from the customer
C) the work is completed on the job, whether or not the cash is received
D) the company signs a contract – C) the work is completed on the job, whether or not the cash is received
Report Form – Total assets on top, total liabilities and total O.E underneath
Carrying Value – The face value of a bond plus the amount of unamortized premium or minus the amount of unamortized discount.

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