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28 Cards in this Set
- Front
- Back
Sole proprietor means that tax is ____ and liabilitiy is _____ |
Tax is personal |
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In a general partnership is and tax, liability is: |
two or more people |
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If you limit the liability you form a |
Limited partnership |
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in limited partner ship you designate |
Limited partnership to 1 more people |
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whats the difference between general and limited partner? |
General has say in day to day operations, limited does not, general partners are 100% liable, limited is liable in only the amount they invest in |
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Corperation creates a |
a seperate legal entity |
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Trust is |
Hold assets for someone else |
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Joint venture is |
Two entities, common purpose |
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Why do we use financial statements |
Tax, Legal, Monitoring |
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When you prepare financial statements, you must use the ________ principle |
GAAP |
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Cost principle is |
cost principle says it is the original cost of an asset that you record on your books |
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Revenue principle is |
revenue principle says, revenue is recognized when earned, NOT when received |
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Matching principle |
Expense are recognized when incurred, not when paid (accrual accounting) (paying on credit) |
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Objectivity principle is |
Data can be verified |
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Consistent principle |
Keep things the same, using the same method |
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Fiscal period is |
Accounting year, any date of the year in financial statements |
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Income statment is |
The performance of the company over a period of time |
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Balance sheet is |
"As at" certain date - company's Assets and liabilities, what they own and what they owe |
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CA |
Current Assets - inventory that well be sold within a year e.g. |
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Non current assets are |
Something that wont be sold everyday |
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Non current liability is |
something you owe, but not right now |
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Interest expense is |
the cost of borrowing money, can be written off |
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Depreciation is |
Devaluing asset overtime |
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CCA is |
Capitol Cost Allowance (tax deductible) |
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Straight line depreciation is |
Cost - Salvage |
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Book value is |
Value - Depreciation up to date |
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two rules for capitol cost value |
rule 1 - claim half in year 1 rule 2 - claim 0 in the final year (dispose the asset) |
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Cost of goods sold is |
Begining invetory |