Financial Accounting Chapter 1

Income Statement limitations – °Does not show the quality of the goods and services being sold (non-financial information)
°Depreciation expenses are based on estimates so are not accurate
**ON EXAM**
An account is a part of the financial information system and is described by all EXCEPT which one of the following? – B. An account is a source document
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An account has a debit and credit side
An account may be part of a manual or a computerized accounting system
An account has a title
DEBIT – THE LEFT SIDE OF AN ACCOUNT
types of capital expenditures – repairs
betterments
extraordinary repairs
assessments
Extension – An additional period of time given by the sponsor to an organization for the completion of work on an approved grant or contract. It allows previously allocated funds to be spent after the original expiration date.
Periodic Income Statement – Cost of Goods Sold
Merch. Inventory
Purchases
Less Purch. R&A
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Net Purchases
Freight-In
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Net cost of purchases
Cost of Goods Available for Sale
Less Merch. Inventory
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Cost of Goods Sold
revenue – increase in owners equity
Credit – when you buy property and agree to pay for it later.
accounting event – an economic occurrence that changes an enterprise's assets, liabilities, or stockholder's equity
skills – the activities that a persondoes well
Many of the current methods to measure quality emerged with the concept of scientific management in the early twentieth century.
Accrued expenses – Expenses incurred but not yet paid in cash or recorded.
Bank statement – Report of deposits, withdrawals, & bank balances sent to a depositor by a bank
GAAP (Generally Accepted Accounting Principles) is run by what government agency? – SEC(Securities and Exchange Commission)
Allowance for Doubtful Accounts – Is a contra-asset account containing the estimated uncollectible account receivable.
leverage – Indicates how much of the company's assets are financed by equity. The higher the ratio the more assets are funded debt.
contrato social – articles of incorporation, association (SRL)
revenues – Einnahmen, Erlöse, Einkünfte
Mаny оf the current methоds tо meаsure quаlity emerged with the concept of scientific management in the early twentieth century.
financial records – dokumenty finansowe
The concept of keeping a firm's financial records separate from the owner's personal financial records. – separate entity assumption
TEST!! Separation of duties – Authorization, custody of assets, record keeping
STATEMENT OF EARNINGS – SUMMARY OF AN ENTITY'S REVENUES, EXPENSES, AND NET INCOME OR NET LOSS FOR A SPECIFIC PERIOD. ALSO CALLED INCOME STATEMENT OR THE STATEMENT OF OPERATIONS.
who gives you capital – investors, own pocket, loans

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