Ch4 The Accounting Cycle

Internal Users – Management and Employees
Balance Sheet – A basic financial statement, it reveals the assets, liabilities, and equity of a business at a particular time.
straight line depreciation – (cost – salvage value) / Estimated Useful life in years
Accounts receivable – an unwritten promise by a customer to pay, at a later date, for goods sold or services rendered.
Assets listed on a company's balance sheet are
1. resources that the company has on hand on the date of the balance sheet that are available to use after that date
2. resources that the company used up during the last year
3. stated at their current market value
4. resources that the company purchased during the year that ended on the balance sheet date. – 1. resources that the company has on hand on the date of the balance sheet that are available to use after that date
T account – An accounting device used to analyze transactions..
Profit – The income that succeeds exspeses
Type A blood can safely donate RBCs to _____________ and can receive RBCs of type___________.
Revenue, Income Statement – Type and Statement for: Interest Earned
Accrual Basis Concept – The effects of transactions and other events are recognised when they occur and reported in the financial reports of the period to which they relate.
Segment Margin > 0 – Product line should be continued
Horizontal Analysis – "trend" or "time series"
%Increase or Decrease = (current- prior)/ prior year amount
tangible – tárgyi(érinthetÅ‘)
Operating cycle – The average time that it takes to purchase inventory, sell it on account, and then collect cash from customers.
What is the accounting equation? – Assets = Owner's equity + Liabilities
Type A blооd cаn sаfely dоnаte RBCs to _____________ and can receive RBCs of type___________.
*Chapter 5: the Source Documents.* – Cash Receipts, Cheque butt, Invoice (Sales Invoice & Purchase Invoice), Memo
credit memorandum – Source document prepared by the vendor showing the amount deducted for returns and allowances

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