Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
15 Cards in this Set
- Front
- Back
|
balance sheet is also called
|
statement of financial posistion
|
|
|
balance sheet equation
|
A= L+OE
A= Paid in Capital +RE A= L + paid in capital + revenue - expenses |
|
|
Increases in Ownership
|
Revenues
|
|
|
Decreases in Ownership
|
Expenses
|
|
|
accrual basis
|
when the co immediatley accounts for revenues and expenses when they occur instead of when a co receives or pays cash
|
|
|
cash basis
|
expense recognition occurs when the company pays and receives cash
|
|
|
explicit transactions
|
credit sales, cash sales, expenses etc..easy to identify
|
|
|
implicit transactions
|
difficult to account for such as passage of time. day to day accounting procedures typicaly ignore
|
|
|
four types of adjusment entries
|
1 expiration of unexpired costs
2 recognition (earning) of unearned Revenues 3 accural of unrecorded expenses 4 accural of unrecorded revenues |
|
|
adjustments (adjustment entries)
|
used to account for implicit transactions
|
|
|
adjustment type I-Unexpired Cost
|
is any asset that managers expect to become an expense in future periods
|
|
|
-Depreciation
|
the amount an asset decreases in value each period over its useful life
|
|
|
Residual Value
|
the estimated worth at the end of an assets useful life.
|
|
|
straight line deprication formula
(most popular method used in accounting) |
SL Dep = Orig cost - est value
________________ years of useful life |
|
|
Adjustment type II-Recognition (earning) of Unearned Revenues (defered revenues)
|
gained a cash advance for goods that will be delivered to the end customer at a future date
|
