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acc final


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accounting equation
assets = liabilities + stockholders equity
balance sheet
assets, liabilities, Stockholders equity
multi step Income statement
net sales - COGS = Gross margin,
Gross margin - operating expenses = income from operations.

+ other revanues and expenses = income before taxes

ends in Net income
Statement of retained earnings
retained earnings 20x5
net income
less dividentds
retained earnings 20x6
income statement
income before taxes
net income
inventory turnover
COGS/ Avg inventory
Days inventory on hand
360/Inventory turnover
unless there is evedence against, the accountant assumes that the business will continue indefinately
recognition of an expense that has come about but has not yet been recorded
paid but not recognized
closing process
1)close credits to income summary account
2)close debits to income summary account
3)close income summary account to retained earnings account
4)close dividends to retained earnings account
capital expenditure
an expenditure for the purchase or expansion of a long-term asset
improvements that do not add to the physical layout of a plant asset
extraordinary repairs
repairs that significantly enhance a plants assets estimated life or residual value.
revanue expenditure
an expenditure for ordinary repairs and maintenance of a long term asset
dividend yield
dividend per share/ market price per share = a %
price/ earnings ratio
market price per share/ earnings per share

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