Financial Accounting Ch 5

documentos a cobrar – notes receivable
What is the Cost principle? – An accounting principle that states that companies should record assets at their cost.
monetary unit assumption – requires that only those things that can be expressed in money are included in the accounting records
Bilateral Modification – Change to a contract that requires signatures of both the contractor and the contracting officer.
Receipt – A business from giving written acknowledgement for cash received
reliability – the original amount to purchase land is verifiable through the contract documents
capital expenditures – cost of adding PPE for more THAN ONE accounting period
*long-term benefits to a company
Assets – liabilities = – Stockholders's equity or owner's equity (net assets if a nonprofit)
In agency theory, the owner tries to find a managerial performance measure that is 'congruent.' Which of the following best defines a 'congruent' performance measure?
Segregation of duties – Related tasks should be assigned to different people. One serves as check on the other. Ideally, the person who records credit sales should not be the same person who records the collections of A/R from customers. The person who records collections should be someone other than the person who opens mail and makes deposits. The related roles of purchasing & receiving & paying for goods should be separated. The person who keeps track of the company's equipment and property should not have physical control or possession of the assets.
Term loan – A form of external finance provided by banks and other lenders for a specific purpose and repaid over time.
In аgency theоry, the оwner tries tо find а mаnagerial performance measure that is 'congruent.' Which of the following best defines a 'congruent' performance measure?
A plant asset was purchased by the funeral home costing, $8,000. It has a useful life of 3 years and a salvage value of $2,000. Using the straight-line method of depreciation, what would be the yearly amount of depreciation? – $2,000
How are company intangibles usually amortized? – on a straight line basis

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