AccountingMIdtermAnswer Key.docx - 1 This represents the...

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1. This represents the amount of money owed by the customer or debtor to the business evidenced by a promissory note. Notes receivable 2. These are resources controlled by the business as a result of past transactions and events and from which future economic benefits are expected to flow to the business. Asset 3. They represent the costs being incurred by the business in generating revenues. Expenses 4. A system in which a debit entry and a credit entry is entered for each transaction. Double-entry bookkeeping 5. This refers to an advance payment made by the business to cover for future rental payments. Prepaid rent 6. This represents manual or automated machines used in the business like computers, laptops, ring binders, and delivery vehicles. Equipment 7. Examples of this asset includes tables, chairs, filing cabinets, and display racks. Fixtures and furnitures 8. These are earnings arising from the main line of operations of the business. Revenues 9. This is a contra-valuatiion account which refers to the portion of accounts receivable that is estimated to be uncollectible at the end of a particular accounting period. Allowance for doubtful accounts 10. This is a contra-valuation account which refers to the aggregate portion of the total cost of property, plant, and equipment that has been charged to depreciation expense. Accumulated depreciation 11. A business organization formed by at least fifteen individuals, operated to benefit each member. Corporation 12. Business operation that involves purchasing and converting raw materials into finished product. Manufacturing business 13. Owners who originally formed the corporation. Incorporators 14. An economic unit that sells goods and services with the prime objective of generating profit.
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