Accounting Chapter 4 Vocab

External transactions – Exchanges of economic value between one entity and another entity
time period assumption – presumes that an org activities can be divided into specific time periods (month, 3 months, quarter, year)
Preventive controls – Keep problem from happening in first place
Net income – the final income measure after the provision for income taxes is subtracted from income before taxes
Equivalent units are calculated separately for each input. – True
Budgeted Sales – =Sales Forecast (in units) x unit selling price
dividends in arrears – cumulative meaning preferred dividends not paid
depreciation – the loss in value of a fixed asset due to wear and tear and the passage of time;or a method of matching the cost of a fixed asset against the revenues that the fixed asset will help produce during its useful life
Risks – Civic action usually involves challenging power holders to change their policies and behaviour towards people living in poverty. We advocate peaceful approaches to social change, but even this can sometimes involve risks for social activists which can manifest themselves as threats and violence. Carrying out a structured risk assessment can help in selecting strategies, or thinking through how to minimise risks.
Faithful Representation – information that is not biased
Passage 1 Which of the following is the pattern of organization for paragraphs one and two?
estado de situación patrimonial – balance sheet
consumption ratio – the proportion of an overhead activity consumed
by a product
Ownership of assets of a business by creditors – Liability
disadvantages of entrepreneurs – risk, responsibility, long hours, rely on employers
Accounting records – Organized summaries of a business's financial activities.
The process by which financial information about a business is recorded, classified, summarized, interpreted, and communicated to owners, managers, and other interested parties. – Accounting
Pаssаge 1 Which оf the fоllоwing is the pаttern of organization for paragraphs one and two?
Financial statements – Financial reports that summarize the financial conditions and operations of a business.
Ke – Cost of equity
=Beta *MRP-risk free rate
Generally Accepted Accounting Principles – rules of accounting approved by the Canadian Institute of Chartered Accountants for use in Canada
predetermined overhead rate – an overhead rate computed using
estimated data.

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