Merchandising business – A business that purchases and sells goods
Revenue Recognition Principle – Revenue is recorded when earned, not when cash changes hands.
Asset – What the company has and uses to operate the business
40. On January 1, 2012, Gucci Brothers Inc. started the year with a $492,000 balance in Retained Earnings and a $605,000 balance in Common Stock. During 2012, the company earned net income of $92,000, paid a dividend of $15,200, and issued more common stock for $27,500. What is total stockholders' equity on December 31, 2012?
A. $1,231,700.
B. $1,097,000.
C. $1,201,300.
D. $1,588,300. – C. $1,201,300.
Equity – the difference between assets and liabilities
cash flows from operating activities – reports summary of cash receipts & cash payments from operations
dereognition – bilanço dışı bırakma
Two Ethical Standards For Accountants. – 1) Practitioners shall act with trustworthiness, integrity and objectivity
2) Practitioners shall adhere to acknowledged principles and standard of professional practice.
An unexpected strengthening of the basis will benefit which of the following hedges exposed to basis risk?
Liabilities – Creditors' claims on an organization's assets; involves a probable future payment of assets, products, or services, that a company is obligated to make due to past transactions or events
Scott Company uses the allowance method of accounting for bad debts. During May, the company found out that one of its largest customers filed for bankruptcy. If Scott Company decides to rite off the customer's account, what effect will that decision have on Scott's Company net Income for the period. – There is no effect on net income
An unexpected strengthening оf the bаsis will benefit which оf the fоllowing hedges exposed to bаsis risk?
Assets – Resources a company owns or controls. Ex: cash, supplies, equipment, and land.

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