Financial And Managerial Accounting Chapter 1 Terms

Direct Labor – Consists of labor costs that can be easily traced to individual units of products. Direct labor is sometimes called touch labor because direct labor workers typically touch the product while it is being made.
Property, Plant, and Equipment – Assets with relatively long useful lives that companies use in operating the business and are not intended for resale.
Current liability – A liability satisfying any of the following (1) expected to be settled in the operating cycle (2) primarily held for trading (3) due to be settled within 12 months (4) entity doesn't have unconditional right to defer settlement
The MAJOR challenge when planning fixed overhead is:
a. calculating total costs
b. calculating the cost-allocation rate
c. choosing the appropriate level of capacity
d. choosing the appropriate planning period – c. choosing the appropriate level of capacity
External Transactions – Exchanges of value between two entities, which yield changes in the accounting equation.
Which of the following is not an element of the fraud triangle?
A. Rationalization.
B. Financial pressure.
C. Segregation of duties.
D. Opportunity. – C
Which term refers to the allocation of the cost of an asset over the asset's useful life? – depreciation
Inventory Turnover – Measure the number of times a company sells its average level of merchandise inventory during a period. Cost of Goods Sold/ Average merchandise inventory.
Price Corporation reported a $1,800 balance in accounts receivable on January 1, 2009. During the year, $12,400 of sales on account were made. During the year, Price wrote off asuncollectible, accounts receivable of $850. If the ending balance of accounts receivable is $1,000, what is the amount of cash received from customers? 
account – an individual accounting record of increases and decreases in specific asset, liability, stockholders' equity, revenue, or expense items
Expense – A decrease in owners equity resulting from the operation of the business
Debit – Left side of a t account
Employee – A person who is hired by and works under the control and direction of the employer.
Price Cоrpоrаtiоn reported а $1,800 bаlance in accounts receivable on January 1, 2009. During the year, $12,400 of sales on account were made. During the year, Price wrote off asuncollectible, accounts receivable of $850. If the ending balance of accounts receivable is $1,000, what is the amount of cash received from customers? 
Accrual Accounting – Accounting in which income and expenses are recorded when a transaction occurs regardless of the physical flow of cash.
b. – How is the current ratio calculated? How is it used to evaluate a company?

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