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Definitions |
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liability
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owe something
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Segment
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Subunit of an organization
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Equity
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Owner's claim on assets
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Straight Line
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method equally distributes depreciation to each year
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liabilities
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economic obligations of the organization to outsiders, or claims against its assets by outsiders
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Management Accounting
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Provides information about particular activities within a business, including budgets, costing and evaluating business activities.
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Treasury Stock
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Stockholder's Equity + Balance Sheet
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receivables turnover ratio
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=Net Sales/Average Accounts Receivable
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Account balance
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the amount in an account
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Available-for-sale
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debt & equity
at fair value, changes in value recognized in equity
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If revenues are $20,000 and expenses are $5,000 then the business earned net income of ?
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$15,000
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split-off point
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the point in manufacturing process where come or all of the joint products can be recognized as individual products
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Balance Sheet
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A statement of assets, liabilities, and proprietorship at a specified date
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accounting cycle
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the series of accounting activities included in recording financial information for a fiscal period
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assets
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resources owned or controlled by a company
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Comparability
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The ability to compare the accounting information of different companies because they use the same accounting principles
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Liability Accounts—
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claims by creditors against assets; obligations to transfer assets or provide products or services to others; examples include Accounts Payable, Note Payable, Unearned Revenue, and Accrued Liabilities.
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If accounts receivable goes down cash goes _____
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up
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Internal auditors
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Employees of the business who ensure that employees are following company policies and operations are running efficiently as well as determining whether the company is following legal requirements
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capital stock
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Total shares of ownership in a corporation
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manual accounting system
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A system in which accounting information is recorded and proccessed by hand
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current ratio
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total current assets / total current liabilites
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processing stamp
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Placed on the invoice to enter information, like date invoice is to be paid, discount amount, and check number
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Work in Progress
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That portion of manufactured inventory that had begin the production process but is not yet complete.
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Debt to Equity Ratio
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ratio indicates the relative proportions of debt to equity on a company's balance sheet.
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physical inventory
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used for both the periodic and perpetual approach, account for shrinkage, theft, lost products, required for periodic approach
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merchandiser
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earns net income by buying and selling merchandise wholesalers or retailers
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investments in financial assets
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Influence- not significant
% interest- <20%
Accounting treatment- classified into one of the four categories (held-to- maturity, held for trading, available-for-sale, designated at fair value) based on management intent and type of securities
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The check and remittance advice triggers
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the receive payment process
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closing entries
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entries made at the end of each reporting period to transfer the balances of the temporary owner's equity accounts to the permanent owner's equity account and to reduce the balance in the temporary owner's equity accounts to zero in preparation for the next accounting period
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coordination of benefits
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the provision of an insurance contract that limits benefits to 100% of the cost
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cash receipts journal
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special journal used to record all cash receipt transactions
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revoloving charge plan
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payment system in which customers pay a percentage of their account plus finance charges on a monthly basis
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Gross Earning
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Total amount earned by an employee for a pay period before deductions.
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Useful Life
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The length of service of a productive asset
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NON-CURRENT ASSETS (Definition)
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assets not expected to be liquidated or used up within one year (or one operating cycle of the company, if longer than one year).
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On Account
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Buying _ is the same as buying on credit
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special amount column
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A journal amount column headed with an account title
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Opening an account
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Writing an account title and number on the heading of an account is called opening and account.
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What should accompany the direct materials budget?
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Schedule of expected cash disbursements for raw materials
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Bonds with Warrants
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are accounted for as debt based on fair value, but the warrants are accounted for as equity.
Bonds & warrants are treated as two separate securities.
Warrants can be detached from Bonds and sold separately.
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book value/undepreciated cost
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the cost of a fixed asset less its accumulated depreciation
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what is the investment responsibility center
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manager is responsible for revenue, cost, and assets, use return on investment (ROI), company itself is always an investment center
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What do adjusting entries do?
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record events that have occured but that we have not yet recorded
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Carrying (book) value of bonds
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Net amount at which bonds are reported on the balance sheet; equals the par value f the bonds less any unamoritized discount or plus any unamoritized premium; also called carrying amount or book value
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a bank reconciliation explains the differences between
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the balance per bank statement and the cash balance per the accounting records of the depositor
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At the maturity date of a bond payable:
A) the discount on bonds payable will have been amortized to zero.
B) the premium on bonds payable will have been amortized to zero.
C) the carrying value of the bonds will always be equal to the par value of the bo
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D) all of the above will occur
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