Century 21 Accounting Chapter 3

accounting – is the words and formats used to present information to others outside the business
T-account – Tool used to show the effects of transactions and events on individual accounts. (p.46)
Merchandise – goods purchased for resale at a profit
credits are put on the – right
Accrued Income – Income that has been earned but not yet received and recorded.
To improve the net profit dollar which is actually more important – If the net profit percentage has only fallen because of a fall in mark up or gross profit percentage then continued to increased in sales will continue to improve the net profit dollars
Legal Capital – Most states require companies to maintain a minimum amount of stockholders' equity for the protection of creditors. This is usually the par value of the shares issued
The bone marked “X” is the:  
(c) Imperative for providing comparisons of a company from period to period. – Comparability (Consistency).
Order of the steps in the
accounting cycle at the end of the accounting period – Prepare a trial balance, journalize and post
adjustments, prepare financial statements, and
journalize and post the closing entries.
sales – Received $798 for services: credit __________
The bоne mаrked “X” is the:  
withholding allowance – a deduction from total earnings for each person legally supported by a tax payer
Balance Sheet – At a specific point in time:

Shareholders' Equity

Financing – Liability. Investing paying back
memorandum: – a form on which a brief message is written describing a transaction
accrued interest – فوائد مستحقة

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