Accounting 2101

Receivables - Answer Amounts due from individuals and companies. 3 different types. Accounts Receivable (A/R) - Answer Amounts customer owe on account. Pay within 30-60 days. Notes Receivable (N/R) - Answer Written promise for amounts to be received. 60-90 days or longer. Other Receivables - Answer Interest receivable loans to company officers. Bad Debt Expense (BDE) - Answer Losses from extending credit. Allowance for Doubtful Accounts - Answer AFDA 2 Issues ...

retained earnings - Answer An amount earned by a corporation and not yet distributed to stockholders. property - Answer anything of value that is owned or controlled plant and equipment - Answer Property that will be used in the business for longer than one year. assets - Answer money and other valuables belonging to an individual or business liabilities - Answer Amounts owed to creditors Stockholders' Equity - Answer The owners' claim to assets. Account...

Journal entry to pay sales tax - Answer -Debit sales tax payable -Credit cash Secured bonds - Answer Have specific assets of the issuer pledged as collateral for the bonds Unsecured bonds - Answer Issued against the general credit of the borrower Convertible bonds - Answer Bonds that can be converted into common stock at the bondholder's option Callable bonds - Answer Bonds that the issuing company can redeem at a stated dollar amount prior to maturity

Plant Assets - Answer Long lived, tangible assets used in the operations of a business (Ex. Land, Buildings, Equipment, Furniture, Fixtures, Automobiles) Depreciation - Answer The process by which businesses spread the allocation of a plant asset's cost over its useful life Cost Principle - Answer A principle that states that acquired assets and services should be recorded at their actual cost Lump Sum Purchases - Answer Capital Expenditures - Answer An expenditure...

Sole Proprietorship - Answer a business owned by one person. The business is a separate entity for accounting purposes. However, a proprietorship is not a separate legal entity from its owner. Partnership - Answer a business owned by two or more people, called partners, who are jointly liable for tax and other obligations. Like a proprietorship, no special legal requirements must be met in starting a partnership. The only requirement is an agreement between partners to run a business to...

Methods for writing off accounts that are deemed uncollectible - Answer - allowance method - direct charge off method allowance method - Answer charging uncollectible accounts expense in the period when the sales are recorded, as an adjusting entry at the end of the period - required by GAAP - an estimate is debited to Uncollectible Accounts Expense and credited to Allowance for Doubtful Accounts - matches uncollectible accounts expense to sales

Revenue expenditures - Answer Costs not included in a plant asset account that must be expensed immediately Capital expenditures - Answer Costs that are not expensed immediately but are instead included on a plant asset account Costs of Land - Answer 1. Cash purchase price 2. Closing costs such as title and attorney's fees 3. Real estate broker's commissions 4. Accrued property rates on land assumed by purchases Land improvements - Answer Structural additions made ...

• Identify the advantages of the corporate form of business organization - Answer Easier to transfer ownership Easier to raise funds No personal liability Identify the disadvantages of the corporate form of business organization - Answer double taxed file annual paperwork • Identify internal users of financial information. - Answer Marketing- price for iPod to maximize net income? Management- which product line most profitable; should eliminate any products? Finance- have e...

5.1 Perpetual Inventory System - Answer -Maintain detailed records of the cost of each inventory purchase and sale. -Records continuously show inventory that should be on hand for every item. -Company determines cost of goods sold each time a sale occurs. Advantages: -Traditionally used for merchandise with high unit values. -Shows the quantity and cost of the inventory that should be on hand at any time. -Provides better control over inventories than a period system. 5.1 Perio...