Chapter 4 Double Entry Accounting

Journalizing – Recording transactions in a journal
Internal Users – Persons using accounting information who are directly involved in managing the organization.
revenue – an increase in owner's equity resulting from the operation of a business
Place the following steps from the five-step decision process in order:
A = Make predictions about future costs
B = Evaluate performance to provide feedback
C = Implement the decision
D = Choose an alternative

a. D C A B
b. C D A B
c. A D C B
d. D C B A – c. A D C B

entry – information for each transaction recorded in a journal
Fixes Assets/Long Term Assets. – Property of a relatively permanent nature used in the operation of a business and not intended for resale.
Chart of Accounts – List of accounts used by a company; includes an identification number for each account.
outstanding stock – held by the stockholders
The structures below are ________.
Balance sheet – assets which are the firm's resources
liabilities are the firms obligations
stockholders equity is the stockholders claim on the assets of the firm
merchandise inventory – The amount of goods on hand for sale to customers
Financial Statement – 1.Income statement
2.Statement of Owner's Equity (Sole Prop & Partnership)
-corporation retained Earnings statement
3.Balance Sheet
franchises – give the exclusive right to operate or sell a specific branded product, the length of the franchise is negotiated between the franchisor and the franchisee
Creditors – those who lend money or deliver goods and services before being paid, are interested mainly in whether a company will have the cash to pay interest charges and to repay the debt on time
The structures belоw аre ________.
Accounting Standards for Private Enterprise – accounting rules for Canadian private business
Proprietary perspective – Is perspective that financial reporting should be focused only on the needs of the shareholder.
In a standard costing system, a cost-allocation base would MOST likely be:
a. actual machine-hours
b. normal machine-hours
c. standard machine-hours
d. Any of these answers is correct. – c. standard machine-hours
Asset – An economic resource that is objectively measurable, results from a prior transaction, and will provide future economic benefit

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