Accounting 122 Flashcards

Terms Definitions
Prepaid insurance
Unexpired insurance
a group of accounts
Working Capital
Current Assets- Current Liabilities
each member of a partnership
Operating Activities
(income statement)....buying and producing goods and services and paying taxes
Anything of value that is owned
service companies
organizations that sell services rather than goods
worst case scenario of contribution margin model
Its ability to pay obligations expected to become due within the next year or operating cycle.
Accounting Income Formula
Cash Flow - Depreciation
Accounting records
organized summaries of a business's financial activities
In finance, the purchase of a financial product or other item of value with an expectation of favorable future returns. In general terms, investment means the use money in the hope of making more money.
Predetermined Overhead Rate
Estimated ttl manufacturing overhead cost/ estimated total amount of the allocation base
File Maintenance
The procedure for arranging accounts in a general ledger, assigning account numbers, and keeping records current
Credit Memorandum
Notification that the sender has credited the recipient's account in the sender's records.
Form 941
a form for federal tax returns
The financing period can vary for different companies, it can be 120 days or even longer for merchandising companies.
Performance Measures
Indicators about whether managers are achieving business goals and whether the business activities are well managed.
Service Business
a business that performs an activity for a fee
the principles of right and wrong that guide an individual in making decisions
gross earnings
income before any deductions have been made
Reports should be able to be compared over time
Gross Profit Percentage
Gross profit / net sales revenue
Theory of Constraints
Manufacturing strategy that focuses on reducing the influence of bottlenecks on production processes
Activity-based costing
A system of allocating overhead costs that assumes that activities, not volume of production, cause overhead costs to be incurred
Those costs that vary as the production/sales of units change. Usually represented as a 'per unit" cost.
Variable cost
treasury stock
a corporation's own stock that has been issued and subsequently reacquired from shareholders by the corporation but not retired
storage unit used to record and store accounting info
a form on which a brief message is written describing a transaction
Just In Time (JIT)
Inventory management that reduces cost for storage
Credit memoradum
A form prepared by the vendor showing the amountdeducted for returns and allowances is called a credit memordaum
Retail Merchandising Business
A merchandising business that sells to those who use or consume the goods.
Controlling Accounts
an account in a general ledger that summarizes all accounts in a subsidiary ledger
General Ledger
A general ledger is the collection of all balance sheet, income, and expense accounts used to keep the accounting records of a business. A general ledger works with double entry accounting and journal entries for each transaction.
projected benefit obligation
measure includes not only the benefit obligation attributable to an employee's service up to a specific date, but also an estimate of benefits obligations based of future compesation levels.
Debit side
the left side of a standard account is called the
General amount column
A journal amount column that is not headed with an account title
Carrying (Book) Value Bonds
Discount is deducted from the par value of bonds
horizontal analysis of income statement
new-old over old
shows the change from year to year
Projected unit credit method (IFRS)
used to estimate defined benefit obligation. For each period in which employees provide services, they earn a portion of the post-employement benefits that their company promised to pay.
petty cash slip
a form showing proof of a petty cash payment
premium price emphasis
strive to be unique or best so they can charge more. 
Tommy Hilfiger, BMW, John Deere.
Cost of Captial
Cost of Captial = (Weigt of Debt * Cost of Debt) + (Weigt of Equite * Cost of Equity)
To record transfer of cash and investments(at fmv)into a cash and investments pool
(DB)Equity in pooled investments (CR) cash (CR)Investments (CR)Rev-change in fair value of investments DB if unrealized loss or CR if unrealize gain to balance afe
value of supplies used during the fiscal period
after the adjusting entry for Supplies has been psoted, Supplies Expense has an up-to-date balance that is the
What are the three categories of bond issuance?
Face Value- (stated rate = market rate)
Premium- (stated rate > market rate)
Discount- (stated rate < market rate)
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