Accounting Basics

Accounting – Planning, recording, analyzing , and interpreting financial information
Office Equip. – Asset / Balance sheet
Office Equipment – Normal Balance: Debit
Type of Account: Asset
Financial Statement: BS
The difference between the cost of the asset and the accumulated depreciation is the: – Book value or undepreciated cost
Anything having its own separate identity, such as an individual, a town, a university, or a business. – entity
Net Profit – The difference between net profit and expenses when net profit is larger.
To improve the net profit dollar which is actually more important – If the net profit percentage has only fallen because of a fall in mark up or gross profit percentage then continued to increased in sales will continue to improve the net profit dollars
account balance – the amount in an account
Partnership – Owned by two or more
The solar system is a member of a galaxy containing approximately 100 billion stars.
Types of Responsibility Centers – -cost
Income statement – another term for profit and loss statement is
Source Documents – -any business paper/document used to verify the dollar amount of any business transaction
-required by the accounting department to record the transactions
-ex. copies of cheques, bills, invoices, credit card receipts, store receipts, etc
Even in the face of changing conditions, attaining the original budget is critical. – False
Revenue,Income Statement, Credit, Temporary – Sales Revenue
Net loss – the difference between total revenue and total expenses when total expenses is greater
The sоlаr system is а member оf а galaxy cоntaining approximately 100 billion stars.
Special – An endorsement used to transfer ownership of a check
Which of the following best describes the historical cost concept?
Recording revenues in the period in which they are earned.
Adjusting assets to reflect inflation
Recording transactions in terms of money
Recording transactions based on the cost at the time of the transaction.
Adjusting assets to reflect an increase in their value – d.
Recording transactions based on the cost at the time of the transaction.
Name the qualitative characteristic. – Relevance, Reliability, Understandability, Comparability.

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