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Accounting ll
Ch. 26 vocab
| Term | Definition |
|---|---|
| Accounting Period Cycle | Changes in financial information are reported for a specific period of time in the form of financial statements. |
| Adequate Disclosure | Financial statements contain all information necessary to understand a business's financial statement. |
| Net Sales | Total sales less sales discount and sales return and allowances. |
| Net Purhases | Total purchases less purchases discount and purchases returns and allowances. |
| FYI - Assessing a Corporation | The net income before federal income tax is the best measure the corporation has to asses its profitability. |
| Statement of Stockholder's Equity | A financial statement that shows changes in a corporation's ownership for a financial period. |
| Capital Stock | The amounts in the capital stock section of the income statement are obtained from the general ledger account. |
| Par Value | A value assigned to a share of stock and printed on the stock certificate. |
| FYI - Reporting Assets Book Value | An asset's book value is reported on a balance sheet by listing three amounts: 1) the balance of the asset account, 2) the balance of the asset's contra account, and 3) book value. |
| FYI - Classification of Liabilities | Liabilities are classified according to the length of time until they are due. Short time = current liabilities. |
| Long-term Liabilities | Liabilities owed for more than a year. |
| FYI - Accounting Statement for a Corporation | Total assets must equal the total of liabilities and stockholder's equity. If these totals are not equal, identify the errors before preparing closing and reversing entries. |
| FYI - Corporation Balance Sheet | The balance sheet is the primary source of data to determine the financial strength of a business. |
| Working Capital | The amount of total current assets less total current liabilities. |
| Ratio | A comparison between two numbers showing how many times one number exceeds the other. |
| Current Ratio | A ratio that shows the numeric relationship of current assets to current liabilities. |
| FYI - Corporation Adjusting Entries | Because a corporation must pay federal income tax, only a corporation will have an adjusting entry for federal income taxes payable. |
| FYI - Corporation 4 Closing Entries | 1) Closing entry for income statement accounts with credit balances (revenue and contra cost accounts). 2) Closing entry for income statement accounts with debit balances (cost, contra revenue, and expense accounts) |
| FYI - Corporation 4 Closing Entries (cont.) | 3) Closing entry to record net income or net loss in the retained earnings account and close the income summary account. 4) Closing entry for the dividends account. |
Created by:
mmincy
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