Accounting Terminology

Multiple-Step Income Statement – A type of income statement on which several subtotals are computed before the net income is calculated.
The financial interest of the owner of a business; also called proprietorship or net worth. – Owner's equity
Inventory Shrinkage – The loss of inventory that occurs because of theft, damage, and errors.
sales allowances – Transactions in which the seller either accepts goods back from the purchaser (a return) or grants a reduction in the purchase price (an allowance) so that the buyer will keep the goods.
Post-Closing Trial Balance – A trial balance prepared after the closing entries are posted
A cash discount can occur when a seller wants to encourage early payment of an accounts receivable.
A. True
B. False – TRUE
71. Net income appears in which two financial statements?
A. Balance sheet and income statement.
B. Statement of stockholders' equity and balance sheet.
C. Income statement and statement of stockholders' equity.
D. Net income appears in only one financial statement. – C. Income statement and statement of stockholders' equity.
plant assets – Assets of a durable nature that will be used for operations over several years. *Examples* include buildings and equipment.
An exchange of property or service by a company with another entity – Transaction
What is geometric mean of 8 and 9, rounded to four decimal places?
balance sheet? – describes a company's financial position at a point in time giving its assets, liabilities and equity.
Goodwill – The excess of the purchase price of the company over the market value of its net assets. Only recorded when an entire company is purchased
– Debit goodwill: tells investors that we knowingly overpaid for a good reason (ability to add value)
– Not amortized bc the goodwill of many entities increases in value
income stocks – stocks that have consistently paid high dividends
Electronic funds transfer – Computerized cash payments system that uses electronic impulses to transfer funds
What occurs during financing activites? – -where a company needs to acquire money in order to support its operations
1. debt financing : borrowing money from creditors
2. equity financing: selling stocks to investors
Income Statement – Financial statement that shows the results of operations for the period.
Whаt is geоmetric meаn оf 8 аnd 9, rоunded to four decimal places?
note payable – A liability evidenced by a written promise to make a future payment.
Income Statement – Profit and Loss Statement; Statement of operations; operating statement. A formal financial statement which presents the income, expenses and resulting net profit or net loss for a given period.
The direct write-off method
A. is acceptable for financial reporting purposes.
B. debits Allowance for Doubtful Accounts to record write-offs of accounts.
C. shows only actual losses from uncollectible accounts.
D. estimates bad debt losses. – C
which preposition goes with 'reason'? – The reason for the increase is …

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