Chapter 1 Class Notes
Corporations are separate LEGAL entities
Chief financial officer is not an external user
Taxing authorities are considered external users
Paying and receiving interest is operating activity
The sum of the beginning
The first federal income tax was enacted by the federal government in 1861 as a way to finance the Civil War.
This income tax was repealed by Congress once the war ended. In 1894 Congress passed a federal income tax
to increase federal revenu
Chapter 20 Notes
Budget committee has the responsibility for coordinating the
preparation of the budget
Direct materials budget= direct materials required + desired
ending direct materials - less beginning direct materials
Fixed costs remain the same in total no matter the level of activity
Total fixed costs remain the same in total at every level of activity
Mixed costs change in total, not proportionally
Unit selling price, v
Chapter 3 Class Notes
Retained earnings are decreased by expenses
Receipt of unearned revenue increases assets and liabilities
An account is an individual accounting record of increases and decreases in
specific asset, liability, and s
Chapter 5 Notes
1. Identify the differences between a service company and a merchandising
2. Explain the recording of purchases under a perpetual inventory system.
3. Explain the recording of sales revenues under a perpetual inven
For the year ended December 31, 2012, Mike-T and Goldie, both 45,
married taxpayers filing a joint return with one dependent, reported the following:
Alimony paid toMike-Ts ex-wife, Gator
Chapter 4 Notes
-Revenue recognition principle is the generally accepted accounting principle that
dictates that revenue be recognized in the accounting period it is earned.
- Revenues recognized only when a customer pays = cash basis
Chapter 6 Notes
Which of the following would have the highest inventory turnover?
A grocery store
1. Describe the steps in determining inventory quantities.
2. Explain the basis of accounting for inventories and apply the inventory
Chapter 14 Notes
Managerial accounting places emphasis on special purpose
For internal use, doesnt require an audit by a CPA, reports are
generated as needed
More detailed information than financial accounting
Chapter 2 Class Notes
Expressing a ratio: percentage, rate, proportion
Earnings per share are an indicator of profitability
Use statement of stockholders equity instead of retained
Chapter 7 Notes
1. Prepare a bank reconciliation.
Control Features: Use of a Bank
Contributes to good internal control over cash.
Minimizes the amount of currency on hand.
Creates a double record of bank transactions.