Accounting II 2 Flashcards

Terms Definitions
gross sales
revenue earned
Accounts receivable
book or file
Purchase order
form used in business
asset
anything of value that is owned
Serial bonds
Bonds that mature in installments.
An amount owed by a business
Liability
journal
a form of recording transactions in chronological order
Paid-In Capital
Capital contributed to a corporation by the stockholders and others. 571
Available-for-sale securities
Securities that management expects to sell in the future but which are not actively traded for profit. 622
The Poe Corporation has a simple capital structure. Thaw company has 50,000 shares of common stock outstanding. Net income for the year was $142,000. Poe declared and paid preferred stock dividends of $16,000 during the year. Earnings per share for th
$2.52
the person or business who receives goods on consignment
consignee
Journal entries recorded to update general ledger accounts at the end of fiscal period
adjusting entries
land and anything attached to land
real property
sales returns and allowances
record price adjustments and returned
credit memorandum
form prepared by the vendor showing the amount deducted for returns and allowances
Treasury Stock
Stock that a corporation has once issued and then reaquires. 581
Price-earnings ratio
The ratio computed by dividing a corporation's stock market price per share at a specific date by the company's annual earnings per share. 628
Paid-in
capital Total amount of cash and other assets paid in to the corporation by stockholders in exchange for capital stock.
One reason a dollar today is worth more than a dollar 1 year from today is the time value of money
True
T or F: A departmental statement of gross profit provides a manager with information about revenue and costs for each department
TRUE
T or F: A perpetual inventory provides day-to-day records about the quantity of merchandise on hand
TRUE
T or F: Depreciation expense is a business operating expense
TRUE
trial balance
proof of the equality of debits and credits in a general ledger
Taxable income
The income according to the tax laws that is used as a base for determining the amount of taxes owed. 611
No-par value
stock Capital stock that has not been assigned a value in the corporate charter.
The income before income tax for the first year of operations is $750,000. Because of timing differences in accounting and tax methods, the taxable income for the same year is $550,000. Assuming an income tax rate of 50%, the amount of the deferred incom
B. $100,000
Accounting Period
Time span for which a company reports its revenues and expenses.
T or F: Because of the expense, many business take a periodic inventory only once a year
TRUE
The decrease in the value of a plant asset because of the removal of a natural resource
depletion
T or F: Income and social security are the two federal taxes deducted from earnings of each employee
TRUE
T or F: Each amount in the Sales Credit columns of a departmental cash receipts journal is posted individually to the debit side of the cash account
FALSE
Maturity value
The amount that is due at the maturity or due date of a note.
Mary, Jim, and Mike have partnership capital account balances of $225,000, $450,000 and $105,000, respectively. The income sharing ratio is Mary, 50%; Jim, 40%; and Mike, 10%. Mary desires to withdraw from the partnership and it is agreed that partnership
Jim, $474,000; Mike, $111,000.
When the market rate of interest was 12%, Newman Corporation issued $1,000,000, 11%, 10-year bonds that pay interest annually. The selling price of this bond issue was
C. $ 943,494
Adjusting Entries. Examples?
Journal entries that a company makes at the end of its accounting period to bring the company's revenue and expense account balances up-to-date and to show the correct ending balances in its asset and liability accounts. These always affect an [asset OR liability] AND an expense. (Example: Depreciation, Interest, Supplies used, expired rent, product sold now and delivered over several time periods)
A journal used in a voucher system to record cash payments
check register
Fixed asset impairment
A condition when the fair value of a fixed asset falls below its book value and is not expected to recover. 615
Bond interest paid is
the same whether bonds sell at a discount or a premium.
Crediting the estimated value of uncollectible accounts to a contra account
allowance method of recording losses from uncollectible accounts
Under the corporate form of business organization
the corporation's life is stipulated in its charter.
When admitting a new partner by investment, a bonus to old partners is allocated on
the basis of income ratios before the admission of the new partner.
A statement prepared at the end of a fiscal period of gross profit showing the gross profit for each department
departmental statement of gross profit
In the final step of the liquidation process, remaining cash is distributed to partners
on the basis of the remaining capital balances.
On May 10, Mazili Corporation issues 2,000 shares of $10 par value common stock for cash at $18 per share
May 10 Cash 36000 Common Stock 20000 Paid-in cap. in excess of par 16000
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Definition:
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