Financial Accounting Ch 5

Margin of Safety – Current Sales (budget sales)
– Computed Break-even
= Margin of Safety
In balance – a condition in which the total of the debits and the total of the credits are equal in an account.
Net Income ("the bottom line") – Is the excess of total revenues over total expenses.
Withdraws – Assets taken out of a business for the owner's personal use are called Withdraws
Internal Controls – Policies that allow managers to control and monitor business activities such as company policies, accounting procedures, and physical safeguards to protect assets.
Sale on Account – A sale for which cash will be received at a later date
Market value – How much it would cost to replace a company's current inventory
4 "Special Journals" – Cash Receipts Journal- All cash transactions
Cash Payments Journal- Cash received
Revenue Journal- Receiving money just not in cash
Purchases Journal- Paying money just not in cash form
Payee – The one to whom the bank is order to pay the cash
Translate the following argument into symbolic form and determine if the argument is valid or invalid along with the rule that was used. If politicians are honest then the country does well. Politicians are honest. Therefore, the country does well.
Depreciation on delivery van – DC
Net Pay – The amount left after total deductions are subtracted from gross earnings.
Securities and Exchange Commision – SEC
authorized stock – the total number of shares available to sell stated in the company's articles of incorporation
Revenues – goods or services have been provided to the customer
Account Balance – Difference between total debits and total credits (including the beginning balance) for an account.
Trаnslаte the fоllоwing аrgument intо symbolic form and determine if the argument is valid or invalid along with the rule that was used. If politicians are honest then the country does well. Politicians are honest. Therefore, the country does well.
property, plant and equipment – land, equipment and depreciation
Endorsement. – The signature of the payee or other holder placed on the back of a check or other negotiable instrument.
67. Which of the following statements is NOT correct about the financial statements?
A. An income statement reports revenues, expenses, and net income information.
B. The statement of stockholders' equity presents common stock, dividends, and retained earnings information.
C. A balance sheet reports assets, liabilities, revenues, and expenses.
D. The statement of cash flows shows cash inflows and outflows from operating, financing, and investing activities. – C. A balance sheet reports assets, liabilities, revenues, and expenses.

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