Weisinger Accounting Ch 4

stockholders – people or entities that own stock in a corporation and therefore are its owners
What classification of ratios is defined as: employed by analysts to determine the firm's ability to pay its short-term liabilities. – Liquidity Ratios
Purchase return – Return of goods from the buyer to the seller for a cash or credit refund.
ganancia pérdida antes del impuesto a las ganancias – income loss before income tax
terminal summary – the report that summarizes the cash and credit card sales of a point-of-sale terminal
Fixed asset – long term tangible piece of property that a firm uses in production of its income
Auditors are more concerned with the occurrence assertion for revenues than the completeness assertion because
owners' equity – The claim of the owners of a business to the assets of the business. Also called capital, stockholder's equity, or net assets.
source document – evidence a transaction has occured
Historical Cost – All transactions are recorded at the original acquisition cost to the business at the time of purchase and not the current value.
Net Income or Net Loss (Equation) – Revenue- expenses
What is debit/credit to an expense – + –
Social security tax – A federal tax paid for old age, survivors, and disability insurance
To prepare budgets based on actual data from past periods is preferred since past inefficiencies are excluded. – False
Auditоrs аre mоre cоncerned with the occurrence аssertion for revenues thаn the completeness assertion because
Revenue – The amount a business charges customers for products sold or service performed. -increases owners equity
temporary accounts – income statement accounts that are closed to retained earnings at the end of the accounting period
Assume there is a reduction in the selling price and all other CVP parameters remain constant. This change will:
a. increase contribution margin
b. reduce fixed costs
c. increase variable costs
d. reduce operating income – d. reduce operating income
Income Statement – A financial statement showing the revenue and expenses for a fiscal period

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