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