Accounting

In a period of inflation, the cost flow method that results in the lowest income taxes is the
A. FIFO method.
B. LIFO method.
C. average-cost method.
D. gross profit method. – B
Accrued revenues – Revenues that have been earned but not yet received, ex. Consulting service already performed but hasn't billed customer yet
Additional Problem # 6. Total current liabilities at December 31, 2001 – accounts payable + salaries payable + income tax payables, basically add all payables
principal – the face value of a promissory note upon which interest is computed
When a company makes an investment in its own common stock the effect is – assets decrease and shareholders equity decrease
Temporary Accounts – general ledger accounts that are zeroed at the end of the fiscal year
Social Security Tax – A federal tax paid for old age, survivors, and disability insurance.
relevance – should help users predict further events and confirm current beliefs
equities – the total financial claims to the assets of a business
Economic Return from Investing formula – Economic Return from Investing = (Dividends and Interest Received + Change in Fair Value) / Fair Value of Investments
A power outage is an example of a(n) ________ threat.
whats an accounting organization on code ethics / unethical behavior – American institute of certified public accountants/ sarbanes oxley act of 2002
An account used to summarize the owner's equity in a business – Capital account
accounting equation – An equation showing the relationship among assets, liabilities, and owner's equity
Expense – A decrease in assets,other than withdraws by the owner, which result from efforts to produce revenue.
Bank Statement – An itemized listing of additions to and subtractions from a depositor's account
job-order cost sheet – a subsidiary account to the work-in-process
account on which the total costs of materials, labor, and overhead
for a single job are accumulated.
#5. The nature of an asset is best described as: – an economic resource owned by a business and expected to benefit future operations
A pоwer оutаge is аn exаmple оf a(n) ________ threat.
financing activities – the activities associated with raising money to pay for the operations of the business
Contingent Liabilities – Potential obligation that depends on a future event arising out of a past transaction or event
What are the 3 balance sheet accounts? – Assets, liabilities, and Owners Equity
Double entry accounting – To ensure that the accounting equation is balanced
Balance Sheet – statement used to calculate the equity/net worth of a business.

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