Century 21 Accounting Chapter 1

cash short and over – a special ledger account that is used to keep track of unexplained shortages or overages of cash
partnership – business that is owned by two or more people
C.I.F. – Cost, Insurance, and Freight
partnership – a business owned by two or more individuals; the organization form often used by accounting firms and law firms.
Identify each item with its appropriate financial statement: Income Statement (IS), Statement of retained earnings (SRE), Balance Sheet (BS), Statement of Cash Flows (SCF)
*3 items appear on 2 financial statements, and 1 item shows up on 3 statements.

a. Dividends
b. Salary Expense
c. Inventory
d. Sales revenue
e. Retained Earnings
f. Net cash provided by operating activities
g. Net income
h. Cash
i. Net cash used for financing activities
j. Accounts Payable
k. Common Stock
l. Interest Revenue
m. Long-Term debt
n. Increase or decrease in cash – a. SCF, SRE
b. IS
c. BS
d. IS
e. BS, SRE
f. SCF
g. SCF, IS, SRE
h. BS, SCF
i. SCF
j. BS
k. BS
l, IS
m. BS
n. SCF

Special Endorsement – An endorsement indicating a new owner of a check.
United Metal Industries is considering buying a share of stock in a firm that has the following two possible payoffs with the corresponding probability of occurring. The stock has a purchase price of $50.00. You forecast that there is a 40% chance that the stock will sell for $70.00 at the end of one year. The alternative expectation is that there is a 60% chance that the stock will sell for $30.00 at the end of one year. What is the expected percentage return on this stock, and what is the return variance?
Credit – Right hand side of a leadger
Temporary Accounts – Transferred to a summary account at the end of the period and begin with zero for the new accounting period
Periodic inventory system – an inventory system in which a company does not maintain detailed records of goods on hand and determines the cost of goods sold only at the end of the accounting period
United Metаl Industries is cоnsidering buying а shаre оf stоck in a firm that has the following two possible payoffs with the corresponding probability of occurring. The stock has a purchase price of $50.00. You forecast that there is a 40% chance that the stock will sell for $70.00 at the end of one year. The alternative expectation is that there is a 60% chance that the stock will sell for $30.00 at the end of one year. What is the expected percentage return on this stock, and what is the return variance?
Reliability – The extent to which accounting information can be depended upon to represent what it purports to represent, both in description and in number
corporation – org. under state/fed. as separate legal taxable entity (20% of businesses)
non-operating activities – gains and losses result from
cuentas de resultados – income statement accounts
. The breakeven-point is the sales volume where:
a. Variable costs equal variable revenues.
b. Fixed costs equal total revenues.
c. Total contribution margin equals fixed costs
d. Total revenues equal variable costs.
e. Total revenues equal total costs
f. c and e are both correct. – f. c and e are both correct.

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