Leaving Cert Accounting Ratios

Value assigned based on cost of item – Cost principle
Dishonored Check – a check that a bank refuses to pay
On a bank reconciliation, bank service charges are
A. added to the bank balance.
B. deducted from the bank balance.
C. added to the book balance.
D. deducted from the book balance. – D
What is "expectation gap"?

A. The difference between what the public thinks the accountant is doing and what the accountant thinks they can do.

B. The difference between what the public thinks the accountant is not doing and what the accountant knows they don't do.

C. The difference between what the public thinks the accountant is doing and what Congress says the accountant is doing.

D. The difference between what the accountant is doing and what the Courts say the accountant should be doing. – A. The difference between what the public thinks the accountant is doing and what the accountant thinks they can do.

Liquidity – The ease with which an item can be converted into cash.
#45. Calculate the amount of total assets at January 31, 2002. – 2002 total assets + capital contributions minus inventory cost + inventory sold minus utility bills + land price minus down payment
Temporary owner's equity – accounts accounts utilized to accumulated income, expenses, and owner's withdrawals for one accounting period only.
non-profit entities – organizations that are not motivated by profit
Retained earnings will decrease when – the company declares a dividend
Current Liabilities – Debits to be paid in one year or operating cycle.
TCP is the main ____ protocol that is responsible for establishing connections and the reliable data transport between devices.
Accrued expenses – Costs incurred in a period that are both unpaid and unrecorded; adjusting entries for recording accrued expenses involve increasing expenses and increasing liabilities
When the biz buys land w/ 1/2 in $ & signing a note payable for the other 1/2, owner's equity __ – No effect
Owner withdrawals – Payment of cash or other assets from a proprietorship or partnership to its owner or owners. (p.23)
An outstanding check is – a check that has been issued by the company but has not been presented to the bank for payment
Sole Trader – A business that is owned by 1 individual
TCP is the mаin ____ prоtоcоl thаt is responsible for estаblishing connections and the reliable data transport between devices.
gst – is goods and services tax a 10% on sales and goods
Matching – deferring the expense recognition provides more accurate
1. Valuing assets at historical cost – From independent observability, show me that piece of paper, for checking ownership

Advantages:
Asset was acquired at arms length

Disadvantages:
Using historical cost minus depreciation values often make asset values meaningless

Proprietorship – A business owned and controlled by one owner

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