acc final
Terms
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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
subtotal
less dividentds
retained earnings 20x6 - income statement
-
revanues
Expenses
income before taxes
net income - inventory turnover
- COGS/ Avg inventory
- Days inventory on hand
- 360/Inventory turnover
- continuity
- unless there is evedence against, the accountant assumes that the business will continue indefinately
- accrual
- recognition of an expense that has come about but has not yet been recorded
- defferal
- 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
- betterments
- 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