Accounting Chapter 1 Vocabulary

What makes information useful (according to FASB) – relevant, reliable, comparable and consistent
faithful representation – information that is complete, neutral, and free from error
REVENUE RECOGNITION PRINICPLE – Revenue is recognized when earned; cash reciept NOT a factor that determines revenue
At the beginning of the period, assets were $490,000 and stockholders' equity was $240,000. During the year, assets increased by $60,000, liabilities increased by $40,000, and stockholders' equity increased by $20,000. Beginning liabilities must have been: – $250,000
broker – the person to order stocks or sell
Dow Jones Average – a market indicator that averages 65 stocksin 3 different catergories to determine how the market as a whole is doing
After a performance appraisal interview, supervisors should communicate frequently with subordinates about their performance.
Return on Assets – Net income / Average total assets
book value/undepreciated cost – the cost of a fixed asset less its accumulated depreciation
Equity – A: The value of the enterprise that belongs to the owners.

B: The total value of the money that the owners have invested in to the company.

(Cash Flows) Loss on sale of long term asset – Operasting Activities (add)
Certified Public Accountant (CPA) – Test for tax accounting, managerial accountant and governmental business law , business environment
After а perfоrmаnce аppraisal interview, supervisоrs shоuld communicate frequently with subordinates about their performance.
The interest rate specified in a note is for a
A. day.
B. month.
C. week.
D. year – D

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