Financial Accounting Ch 1 Dj

net worth – another term for o/e the amount of which the business assets exceed the business liabilities
Cash paid to purchase a building appears on the statement of cash flows among the
A) Stockholders' equity
B) Operating activities
C) Financing activities
D) Investing activities – D) Investing Activities
Cash VS Profit – We calculate Cash by: Cash Receipt – Cash Payments
We calculate Profit by: Revenue – Expenses

Cash Inflows are not the same as Revenue & Cash Ouflows are not the same as Expenses.
– A business can earn profit yet suffer a cash deficit
– A business can generate a cash surplus despite suffering a net loss

journalizing – Entering transaction data in the journal.
Normal spoilage adds to the cost of the job to which it is attributed in a job order costing system. – True
Petty cash – A fund of currency & coin established for the payment of small amounts of money is
Incorporated – Registered to pay tax and has limited liability.
Time – offering a product at a convenient time of day or year for consumers
Monetary Unit Assumption – The assumption that requires items on the financial statements to be measured in terms of monetary unit
(3 points) The following data are available for product no. XYZ, manufactured and sold by Shira Corporation: Maximum capacity with present facilities                                      4,500     units      Total fixed cost (per period)                                            $              986,337                                 Variable cost per unit                                                      $              120.29                   Sales price per unit                                                         $              200.48                   The number of units of XYZ that Shira must sell to break- even is:
proprietorship – an unincorporated business owned by a single person who is responsible for its liabilities and entitled to its profits
Cash Equivalent – Is a short-term, highly liquid investment with an original maturity of less than three months.
(3 pоints) The fоllоwing dаtа аre available for product no. XYZ, manufactured and sold by Shira Corporation: Maximum capacity with present facilities                                      4,500     units      Total fixed cost (per period)                                            $              986,337                                 Variable cost per unit                                                      $              120.29                   Sales price per unit                                                         $              200.48                   The number of units of XYZ that Shira must sell to break- even is:
The time period assumption – iii.
rents – operating costs, expenses
Matching Principle – expenses for an accounting period should be matched with the revenue generated during the same period to derive an accurate net income for that period.
Ledger – Group of accounts. Records data from business transactions
Cost of Goods Sold Equation – Beginning Inventory + Cost of Goods Purchased = Costs of Goods Available for Sale – Ending Inventory = Cost of Goods Sold

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