Unit 1 Accounting (basic Accounting Principles)

Income Statement – is the report that measures the success of company operations for a given period of time. (It is also often called the Statement of income or statement of earnings.)

The business and investment community uses the income statement to determine profitability, invest value, and creditworthiness.

It provides investors and creditors the information that helps them predict the amounts, timing, and uncertainty of future cash flows.

Profit – The increase in net worth due to the excess of income over costs & expenses is called
Merchandise Inventory – Includes goods held for sale in the ordinary course of business.
account numbers – the numbers assigned to accounts according to the chart of accounts
International Financial Reporting Standards
(IFRS) – The standards being developed and promoted by the International Accounting Standards
Board.
Optional deductions include – health insurance, dental, retirement plan
expense recognition principle (matching principle) – the principle that matches expenses with revenues in the period when the company makes efforts to generate those revenues
Accounts Receivable Turnover – (Credit Sales)/((B A/R + E A/R)/2))
*Compare against business collection policy to check
365/ A/R Turnover gives how many days for turnover
An object located in your left visual field will be processed in your:
accounting – planning recording analyizing and intrepting financial information.
Equation for Assests – Assets = Liabilities + Common stock + Retained earnings – Dividends + Net profit + Minority interest
Accounting – The process of planning, recording analyzing and interpreting financial info
Blinka Retailers accepted $50,000 of Citibank Visa credit card charges for merchandise sold on July 1. Citibank charges 4% for its credit card use. The entry to record this transaction by Blinka Retailers will include a credit to Sales of $50,000 and a debit(s) to
A. Cash $48,000/ Service Charge Expense $2,000
B. Accounts Receivable $48,000/ Service Charge Expense $2,000
C. Cash $50,000
D. Accounts Receivable $50,000 – A
When the company repays the bank for loans, liabilities __ – Decrease
Financial Accounting Standards Board – FASB
Double entry bookkeeping means an entry is made – As a debit and credit
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Statement of stockholders equity – …
butcher – one who slaughters animals, cuts them up, and sells the meat.
accounting records – organized summaries of a business's financial activities

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