Accounting 1 Normal Balance

A sale of merchandise increases the revenue of a business. – True
for assets debit ___; credit ___ – inc; dec
IPO – formal name for goin public intial public offering
*generally accepted accounting principles (GAAP)* – Generally accepted guidelines for the preparation of financial statements.
Net Income – occurs when revenue exceeds expenses. Net income increases equity.
Business Ethics – The use of ethics in making business decisions
Accrual Basis of Accounting – Reporting income when its earned and expenses when they are incurred
The website ed.gov analyzes trends in default rates for student loans. For the year 2011 the percentage of borrowers who defaulted on their federal student loans within two years of their first payment was 9.1%. Suppose that we select two random samples of college graduates with student loans in 2011. One sample has 50 students. The other sample has 500 students. For which random sample is a 5% default rate less likely?
Employee FICA taxes – Employees must pay withheld taxes to the IRS
Distribution Cost (Expense) – Expenses/ cost incurred in order to increase sales and promote business.
E.g. advertising, wages for door to door salesman, delivery vehicle expenses, depreciation of delivery vehicle, etc.
horizontal analysis – amount of item on current financial statement compared w/ same item on other statement
The website ed.gоv аnаlyzes trends in defаult rates fоr student lоans. For the year 2011 the percentage of borrowers who defaulted on their federal student loans within two years of their first payment was 9.1%. Suppose that we select two random samples of college graduates with student loans in 2011. One sample has 50 students. The other sample has 500 students. For which random sample is a 5% default rate less likely?
Ledger – Grouping of all the T-Accounts, with their balances

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