Unit 1 Accounting (basic Accounting Principles)

GAAP – Generally accepted accounting principles. The standard and rules that accounts follow while recording and reporting financial activities
why bonds are issued – *raise a larger sum of money
* bond interest is deductible from taxes
*bond interest expense reduces net income
12. If a company's fixed cost increases and nothing else changes, which of the following will happen?
1. The company will break even after selling fewer products than it had to sell before the fixed cost per unit increased
2. After breaking even, the company's profit will increase by more for each additional product sold than it would before the fixed cost per unit increased
3. If the company doesn't sell enough products to break even, it will have a smaller loss than it would if it did not increase its fixed costs
4. The company will have to sell more products in order to achieve its target profit – 4. The company will have to sell more products in order to achieve its target profit
asset book value – computed as the asset's total cost less it accumulated depreciation
chronological – in accounting, to record in order of time
Borrowing Money – another way to get money for operations or to purchase things necessary to run the company
– ownership is not shared
– funds have to be repaid in the future with the associated cost of interest reduces earnings
What type of company asset would fixtures be considered? – Plant Asset
Balance Sheet – A basic financial statement, it reveals the assets, liabilities, and equity of a business at a particular time.
Retail merchandising business – a merchandising business that sells to those who use or consume the goods
Which of the following is not a requirement to be an index fossil used in the dating of rocks?
profit – the amount of money earned over and above the amount spent to keep the business operateing.
Deferred income – Income earned but not received is called.
COGS – Begeinning Inventory + Purchases – Ending Inventory .
Risk – Uncertainty about an expected return.
Contra revenue – Account category of: Sales Discounts.
Bank over draft – Advantage:
– provide a saftey net for firms with irregular payments
– most banks are happy for the account to remain over drawn ad longd as it does not exceed the overdraft limit
– readily accessible
-flexible

Disadvantage:
-high interest charge
-can be recalled at short notice

Which оf the fоllоwing is not а requirement to be аn index fossil used in the dаting of rocks?
Which account is credited in the adjusting entry to allocate the cost of equipment? – accumulated depreciation

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