Exam1 - Flashcards(3) - changed during the year. Depicts...

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Entity Concept Reliability Principle
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Information is free of bias: verifiable, representationally faithful, neutral. An accounting entity stands apart as a separate economic unit.
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Going-Concern Concept Stable-Monetary Unit Concept
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Ignores the effect of inflation. Assumes that the business will continue into the future.
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Assets Assets
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Subject to claims either by its creditors or its owners. Economic resources expected to produce a future benefit.
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Owner’s Equity Liabilities
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Claims (debts) payable to creditors; represents the portion of the assets owed to creditors. Represents the portion of the assets owned by the owners.
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Income Statement Assets – Liabilities = Owner’s Equity
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Net Assets Used as a tool to measure/ evaluate performance of management.
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Balance Sheet Statement of Retained Earnings
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Tracks the ongoing balance of earnings not yet paid out to stockholders, and determines why the company’s retained earnings balance
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Unformatted text preview: changed during the year. Depicts the overall financial position of the company at the end of a period. 1. Revenue Principle 2. Matching Principle 3. Time-Period Concept Accounting Equation Helps to analyze the impact of transactions on the financial position. Accrual Accounting Concepts. Depreciation Expense Long-Lived Plant Asset Not expensed when purchased; rather, are expensed as they are used or consumed. Recorded in each accounting period in which the asset is used. Debit Retained Earnings; Credit Expense Accounts Accumulated Depreciation It is a contra asset. Rules for closing Dividend accounts. C Corporation Limited Partner Has limited liability, but no say-so in the affairs of the partnership. Publically trade; unlimited number of stockholders (i.e. Wal-Mart, Target) Equipment S Corporation Smaller corporations (i.e. small businesses). Long-term asset....
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Exam1 - Flashcards(3) - changed during the year. Depicts...

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