101 Understanding The Accounting Equation, Debit And Credits

previsiones para juicios y contingencias – allowances for litigation and contingencies
Net Income/Net Profit. – The difference between gross profit and expenses when gross profit is larger.
intangible asets – Long-term resources that benefit business operations. They usually lack physical form and have uncertain benefits. Examples include patents, trademarks, copyrights, franchises, and goodwill.
External finance – Funds generated from sources outside the business.
Vendor – One who has made a sale is called a
NON-VALUE ADDED ACTIVITIES – ACTIVITIES THAT CUSTOMERS ARE NOT WILLING TO PAY FOR BECAUSE THEY ADD NO VALUE
Liabilities often have the word ___ in their acct title. – Payable
Independence – The personal characteristics of an accountant especially an auditor that refers to both appearing in a fact being objective
Large stock dividends tend to:
Cash Equivalent – Is a short-term, highly liquid investment with an original maturity of less than three months.
What is a liability? – A present obligation of the entity, the settlement of which is expected to result in an outflow of economic benefits
reliability concept – information that is reliable when it is independently verified
long-term investments – stocks and bonds of other corporations that management plans to hold for more than one year
Lаrge stоck dividends tend tо:
Order of the steps in the
accounting cycle at the end of the accounting period – Prepare a trial balance, journalize and post
adjustments, prepare financial statements, and
journalize and post the closing entries.
FASB – Financial Accounting Standards Board.
two constraints – materiality: only information that would influence the decisions of a reasonable person need to be disclosed.

benefit > cost: only information with benefits of disclosure greater than the cost of providing need to be disclosed.

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