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Details

GB 201, Parts of Ch6,7,9,10,11
Vocab
41
Accounting
Undergraduate 2
12/11/2008

Additional Accounting Flashcards

 


 

Cards

Term
Internal Controls
Definition
The processes by which a company safeguards its assets and provides reasonable assurance regarding the reliability of the company's financial reporting, the effectiveness and efficiency of its operations, and its compliance with applicable laws and regulations
Term
Bank Statement
Definition
A monthly report from a bank that shows deposits recorded, checks cleared, other debits and credits, and a running bank balance.
Term
Account Receivable
Definition
Open accounts owed to the business by trade customers.
Term
Notes Receivable
Definition
Written promises that require another party to pay the business under specified conditions (amount, time, interest)
Term
Allowance Method
Definition
Bases bad debt expense on an estimate of uncollectible accounts.
Term
Bad Debt Expense
Definition
The expense associated with estimated uncollectible accounts receivable.
Term
Allowance for Doubtful Accounts
Definition
A contra-asset account containing the estimated uncollectible accounts receivable.
Term
Percentage of Credit Sales Method
Definition
Bases bad debt expense on the historical percentage of credit sales that result in bad debts.
Term
Aging of Accounts Receivable Method
Definition
Estimates uncollectible accounts based on the age of each account receivable.
Term
Inventory
Definition
Tangible property held for sale in the normal course of business or used in producing goods or services for sale.
Term
Merchandise Inventory
Definition
Includes goods held for resale in the ordinary course of business.
Term
Raw Materials Inventory
Definition
Includes items acquired for the purpose of processing into finished goods.
Term
Work in Progress Inventory
Definition
Includes goods in the process of being manufactured.
Term
Finished Goods Inventory
Definition
Includes manufactured goods that are complete and ready for sale.
Term
Direct Labor
Definition
Refers to the earnings of employees who work directly on the products being manufactured.
Term
Factory Overhead
Definition
Manufacturing costs that are not raw material or direct labor costs.
Term
Goods Available for Sale
Definition
Refers to the sum of beginning inventory and purchases (or transfers to finished goods) for the period.
Term
Cost of Goods Sold Equation
Definition
BI (Beginning Inventory) + P (Purchases) - EI (Ending Inventory) = CGS
Term
Specific Identification Method
Definition
Identifies the cost of the specific item that was sold.
Term
FIFO
Definition
Assumes that the first goods purchased (the first in) are the first goods sold.
Term
Average Cost Method
Definition
Uses the weighted average unit cost of the goods available for sale for both cost of goods sold and ending inventory.
Term
Lower of Cost or Market (LCM)
Definition
A valuation method departing from the cost principle; it serves to recognize a loss when replacement cost or net realizable value drops below cost.
Term
Replacement Cost
Definition
The current purchase price for identical goods.
Term
Net Realizable Value
Definition
The expected sales price less selling costs (e.g., repair and disposal costs).
Term
LIFO Reserve
Definition
A contra-asset for the excess of FIFO over LIFO inventory.
Term
Bond Principal
Definition
The amount (a) payable at the maturity of the bond and (b) on which the periodic cash interest payments are computed.
Term
Par Value
Definition
The nominal value per share of capital stock specified in the charter; it serves as the basis for legal capital.
Term
Face Amount
Definition
Another name for principal, or the maturity value of the bond.
Term
Debenture
Definition
An unsecured bond; no assets are specifically pledged to guarantee repayment.
Term
Callable Bonds
Definition
May be called for early retirement at the option of the issuer.
Term
Convertible Bonds
Definition
May be converted to other securities of the issuer (usually common stock).
Term
Indenture
Definition
A bond contract that specifies the legal provisions of a bond issue.
Term
Bond Certificate
Definition
The bond document that each bondholder receives.
Term
Trustee
Definition
An independent party appointed to represent the bondholders.
Term
Authorized Number of Shares
Definition
The maximum number of shares of a corporation's capital stock that can be issued as specified in the charter.
Term
Issued Shares
Definition
Represent the total number of shares of stock that have been sold.
Term
Outstanding Shares
Definition
Refer to the total number of shares of stock that are owned by stockholders on any particular date.
Term
Common Stock
Definition
The basic voting stock issued by a corporation.
Term
Legal Capital
Definition
The permanent amount of capital defined by state law that must remain invested in the business; it serves as a cushion for creditors.
Term
No-Par Value Stock
Definition
Capital stock that has no par value specified in the corporate charter.
Term
Treasury Stock
Definition
A corporation's own stock that had been issued but was subsequently required and is still being held by that corporation.
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