Chapter One Accounting In Action

Current Liabilities – Debits to be paid in one year or operating cycle.
Accounting – a system that collects and processes (analyzes, measures and records) financial information about an organization and reports that information to decision makers (internal and external decision makers use these reports)
Posting – transfer of information from a journal to the general ledger and any subsidiary ledgers
Special journal – a log that is used to record and post transactions of a similar type
retained earnings – represent the accumulated earnings generated by a business's income-producing activities less amounts that have been paid out to the stockholders
retained earnings statement – financial statement that summarizes the amounts and causes of changes in retained earnings for a specific time period
Trial balance – A proof of the equality of debits and credits in a general ledger.
Closing entry for expense accounts – Income Summary: Expense Account.
Owner's Equity and Expense.
Expense: Decreases.
Debit and Credit.
Income Statement.
Acid ratio – Measures liquidity of a company -> a company's ability to pay its debt, creditors, & other short term obligations
It impossible to have a diverse workforce without also having a culture of inclusion.
Adjusting entries:
A) are needed to measure the period's net income or net loss.
B) update the accounts
C) do not debit or credit cash
D) all of the above – D) all of the above
Relevance – Capable of making a difference in decisions made by finsncial statement users.

Helps users predict future outcomes and/or confirm or correct prior expectations and if it is material in nature and amount.

non-current liabilities – debts which will not have to be paid back in the next year
market capitalization – kapitalizacja rynkowa
Calculating Cost depreciation – cost-salvage value/years of life
LINE – DIRECTLY INVOLVED IN ACHIEVING THE BASIC OBJECTIVES OF THE ORGANIZATON.
It impоssible tо hаve а diverse wоrkforce without аlso having a culture of inclusion.
Worksheet – A multiple-column form that may be used in making adjusting entries and in preparing financial statements.
Time Interest Earned – (EBIT/Interest Expense)

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