Accounting

79. Today, financial accounting and reporting standards in the United States are established primarily by the:
A. Securities and Exchange Commission.
B. International Accounting Standards Board.
C. Financial Accounting Standards Board.
D. U.S. Congress. – C. Financial Accounting Standards Board.
trial balance – a proof of equality of debits and credits in a general ledger
Accounting period concept – Covers the period for which the income has been measured
two constraints – materiality: only information that would influence the decisions of a reasonable person need to be disclosed.

benefit > cost: only information with benefits of disclosure greater than the cost of providing need to be disclosed.

Liabilities – Money you owe someone and claims over assets
Company A purchases $1,200 of merchandise from Company B on July 1 with credit terms 2/10, n/30. Company A returns $200 of the merchandise on July 5. On July 11, Company B received full payment from Company A. The amount of the payment on July 11 is
A. $980.
B. $20.
C. $1,176.
D. $1,000. – A
last in first out inventory cost flow method – using the price of merchandise purchases last to caluclate the cost of merchandise sold first (lifo)
**ON EXAM**
Each of the following accounts is closed to Income Summary except: – B. Dividends
The term ____ refers to a system’s ability to handle increased business volume and transactions in the future.
Total earnings – The total pay due for a pay period before deductions
Current ratio test – Current assets divided by current liabilities
W-2 form – wage and tax statement; a report furnished by the employer for each employee indicating gross earnings and deductions for income and FICA taxes
interrogator – one who asks questions of someone aggressively over a long.
cost-benefit principle – methods and procedures allowing managers to control and monitor business activities
Paid wages to employess – Wages Expenses: Cash.
Expense and Assets.
Expense: Increases.
Assets: Decrease.
Increases and Decreases.
Debit and Credit.
Income Statement and Balance Sheet.
Accounts – a ledger is a book of
The term ____ refers tо а system’s аbility tо hаndle increased business vоlume and transactions in the future.
Relevance – The degree that accounting information bears on the decision process, primarily by providing timely feedback on an enterprise's financial condition and performance.
Income Statement – Revenues (-) Expenses
=Net Income

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