Accounting Vocabulary Chps 1 3

Gross Profit – is that part of a business's profit that represents revenue minus cost of goods sold.
Generally Accepted Accounting Principles (GAAP) – Common standards that indicate how to report economic events.
Net Income – Difference between total revenue and total expenses when total revenue is greater
Horizontal Analysis – "trend" or "time series"
%Increase or Decrease = (current- prior)/ prior year amount
For an interest-bearing note, the amount due at maturity is the
A. face value of the note.
B. face value of the note plus interest.
C. maturity value plus interest.
D. cash (net) realizable value. – B
Interest on notes and bonds – Income statement
Other expenses and losses
A ________ is defined as a name, term, sign, symbol, or design, or a combination of these, that identifies the maker or seller of a product or service.
Retained Earnings = – Beg Retained Earning + Net Income – Dividends
Goal congruence – Alignment of organisational, group and individual goals
accounting equation – the basic tool of accounting. Measuring the resources of the business and the claims to those resources . Assets=Liabilties + Equity
Book Value – Cost of a fixed asset less accumulated depreciation
How can a transaction affect only one side of the accounting equation? – If one account is increased, another account on teh same side of the equation must be decreased by the same amount.
expense – a decrease in owner's equity resulting from the operation of a business.
A ________ is defined аs а nаme, term, sign, symbоl, оr design, оr a combination of these, that identifies the maker or seller of a product or service.
Business Transaction – Economic events that affect a company's financial position. To measure a business transaction you must decide when the transaction occurred (recognition issue), what value to place on the transaction (valuation issue), and how the components of the transaction should be categorized (classification issue)
temporary accounts – Accounts used to accumulate information until it is transferred to the owner's capital account.
IASB – International Accounting Standards Board
Normal side balance – Side account increases on

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