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Accounting Final
Accounting
50
Accounting
Undergraduate 1
12/14/2011

Additional Accounting Flashcards

 


 

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Term
Accounts Receivable
Definition
amounts due from customers for credit sales; backed by the customer's general credit standing.
Term
Accounts Receivable Turnover
Definition
measure of both the quality and liquidity of accounts receivable
Term
Aging of accounting receivable
Definition
process of classifying accounts receivable by how long they are past due for purposes of estimating uncollectible accounts
Term
Allowance for doubtful accounts
Definition
contra asset account with a balance approximating uncollectible accounts receivable
Term
Allowance method
Definition
procedure that estimates and matches bad debt expense with its sales for the period and reports account receivable at estimated realizable value
Term
Bad debts
Definition
accounts of customer who do not pay what they have promised to pay
Term
direct writ off methods
Definition
method that records the loss from an uncollectible account receivable at the time it is determined to be uncollectible; no attempt is made to estimate bad debts...
Term
interest
Definition
charge for using money or other assets loaned from one entity to another
Term
maker of the note
Definition
entity who signs a note and promises to pay it at maturity
Term
matching principle
Definition
prescribes expenses to be reported in the same period as the revenues that were earned as a result of the expenses
Term
Maturity date of note
Definition
date when a notes principal and interest are due
Term
payee of the note
Definition
entity to whom a note is made payable
Term
principal of a note
Definition
amount that the signer of a note agrees to pay back when it matures, not including interest
Term
promissory note
Definition
written promise to pay a specified amount either on demand or at a definite future date; is a note receivable for the lender but a note payable for the lendee
Term
realizable value
Definition
expected proceeds from converting an asset into cash
Term
accelerated depreciation method
Definition
method that produces larger depreciation charges in the early years of an assets life and smaller charges in its later years
Term
amortization
Definition
process of allocating the cost of an intangible asset to expense over its estimated useful life
Term
betterments
Definition
expenditures to make a plant asset more efficient of productive; also called improvements
Term
book value
Definition
assets acquisition cost less its accumulated depreciation; also sometimes used synonymously as the carrying value or an account
Term
capital expenditures
Definition
additional cost of plants assets that provide material benefits extending beyond the current period; also called balance sheet expenditures
Term
change in n accounting estimate copyright
Definition
change in an accounting estimate that results from new information, subsequent developments, or improved judgment that impact current and future periods
Term
cost
Definition
all normal and reasonable expenditures necessary to get an asset in place and ready for it intended use
Term
declining balance method
Definition
method that determines depreciation charge for the period by multiplying as depreciation rate by the assets beginning period book value
Term
depletion
Definition
process of allocating the cost of natural resources to period when they are consumed and sold
Term
depreciation
Definition
expense created by allocating the cost of plant and equipment in periods in which they are used; represent the expense of using the asset
Term
extraordinary repairs
Definition
major repair that extend the useful life of a plant asset beyond prior expectation; treated as a capital expenditure
Term
franchises privileges
Definition
granted by a company or government to sell a product of service under specified conditions
Term
goodwill
Definition
amount by which a company's value exceeds the value of its individual assets less it liabilities
Term
impairments
Definition
diminishment of and asset value
Term
inadequacy
Definition
condition in which the capacity of plant assets to small to meet the company production demands
Term
indefinite useful life
Definition
asset life that is not limited by legal, regulatory contractual, competitive, economic, or other factors
Term
intangible assets
Definition
long term asset used to produce or sell products or services; usually lack physical form and have uncertain benefits
Term
land improvetments
Definition
assets that incase the benefits of land, have a limited useful, and depreciated
Term
lease
Definition
rights the lessor grants to the lessee under the term of a lease
Term
leasehold improvements
Definition
alteration or improvement to lease property such as partition and storefronts
Term
lessee
Definition
party to a lease who secures the right to possess and use the property form another party
Term
lessor
Definition
party to a lease who grants another party the right to posses and use its property licenses
Term
modified accelerated cost recovery system
Definition
depreciation system requirement by federal income tax law
Term
natural resources
Definition
assets physically consumed when used; examples are timber, mineral deposits, and oil and gas fields; also called wasting assets
Term
obsolescence
Definition
condition in which, because of new invention and improvements, a plant asset can no longer be sued to produce goods or services with a competitive advantage
Term
ordinary repair
Definition
repairs to keep a plant asset in normal, good operating condition; treated as a revenue expenditure and immediately expensed
Term
patent
Definition
exclusive right granted to its owner to produced and sell an item or to use a process for 17 years
Term
plant assets
Definition
tangible long lived assets used to produce or sell products and services; also call properly, plant and equipment or fixed assets
Term
revenue expenditures
Definition
expenditures reported on the current income statement as an expense because they do not provide benefits in future periods
Term
salvage value
Definition
estimate of amount to be recovered at the end of an assets useful life; also call residual value or scrape value
Term
straight line depreciation
Definition
method that allocates an equal portion of the depreciable cost of plant asset to each accounting period in its useful life
Term
total asset turnover
Definition
measure of a company's ability to use its assets to generate sales; computed by dividing net sale by average total assets
Term
trademark or trade name
Definition
symbol, name, phrase, or jingle identified with a company, product, or service
Term
units of production depreciation
Definition
method that charges a varying amount to depreciation expense or each period of an assets useful life depending on its usage
Term
useful life
Definition
length of time an asset will be productively used in the operation of a business; also called service
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