Accounting Chapter 9

Operating activities equation – Net income
Plus amortization – depreciation – expense
less gains, add losses
+/- increases & decreases in Current assets – opposite – and current liabilities – same.
purchases allowance – Credit allowed for part of the purchase price of merchandise that is not returned, resulting in a decrease in the customer's accounts payable.
Operating Statement- Profit and Loss statement- Earning Statement – Income statement is a.k.a (3)
endorsement – a signature that validates something
General Ledger – A permanent, classified record of all accounts used in a firm's operation; a record of final entry.
Monetary Unit Principle – The monetary unit principle requires that the accounting records are expressed in terms of money. Accounting reports should all be prepared using a single currency.
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
Generally accepted accounting principle (GAAP) – Procedures and guild lines developed by the financial accounting standard board to be followed in the accounting and reporting process
Pacific Fishing LLC is a startup that is working on a new technology for the fishing industry. Because the technology it's working on is highly proprietary, the company is located in the warehouse district of a large western city. Pacific's founder, Ray Sims, rarely gives interviews and is careful to not divulge much about what the company is doing. Which of the following common myths about entrepreneurs does the behavior of its founder, Ray Sims, dispel?
left side=
right side= – debit;credit
What is usually a characteristic of the balance sheet – the balance sheet reports economic resources
Pаcific Fishing LLC is а stаrtup that is wоrking оn a new technоlogy for the fishing industry. Because the technology it's working on is highly proprietary, the company is located in the warehouse district of a large western city. Pacific's founder, Ray Sims, rarely gives interviews and is careful to not divulge much about what the company is doing. Which of the following common myths about entrepreneurs does the behavior of its founder, Ray Sims, dispel?
Financial statements – Means of conveying a concise picture of the profitability and financial position of the business

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