Term
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Definition
| (cash-to-cash cycle) the time it takes for a company to pay cash to suppliers, sell goods and services to customers, and collect cash from customers |
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Term
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Definition
| indicates that the long life of a company can be reported in shorter time periods |
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Term
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Definition
| increases in assets or settlements of liabilities from ongoing operations |
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Term
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Definition
| decreases in assets or increases in liabilities from ongoing operations incurred to generate revenues during the period |
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Term
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Definition
| increases in assets or decreases in liabilities from peripheral transactions |
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Term
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Definition
| decreases in assets or increases in liabilities from peripheral transactions |
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Term
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Definition
| records revenues when cash is received and expenses when cash is paid |
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Term
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Definition
| records revenues when earned and expenses when incurred, regardless of the timing of cash receipts or payments |
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Term
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Definition
states that revenues are recognized when 1) goods or services are delivered
2) there is persuasive evidence of an arrangement for customer payment 3)the price is fixed or determinable 4)collection is reasonably assured |
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Term
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Definition
| requires that expenses be recorded when incurred in earning revenue |
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Term
| What are the four conditions that must be met for revenue to be recognized under accrual basis accounting? |
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Definition
1)Delivery has occurred or services have been rendered
2)There is a persuasive evidence of an arrangement for customer payment
3)The price is fixed or determinable
4)Collection is reasonable assured |
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Term
| Total Asset Turnover Ration Equation and Use |
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Definition
Sales(or Operating) Revenues/Average Total Assets
Used to measure the sales generated per dollar of assets. |
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Term
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Definition
| any outflow of cash for any purpose |
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Term
| Items typically included in Other Items |
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Definition
| Investment Income, Interest Expense, Gains/Losses on Sales of Assets |
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Term
| How it is handled: Receipt of cash before goods or services are delivered |
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Definition
| Debit Cash, Credit Unearned Revenue |
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Term
| How it is handled: Receipt of cash in the same period as the goods or services are delivered |
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Definition
| Debit Cash, Credit Sales Revenue |
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Term
| How it is handled: Receipt of cash after goods or services are delivered |
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Definition
| Debit Accounts Receivable, Credit Sales Revenue |
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Term
| How it is handled: Cash is paid before the expense is incurred to generate revenue |
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Definition
| Debit Supplies, Credit Cash |
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Term
| How it is handled: Cash is paid in the same period as the expense is incurred to generate revenue |
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Definition
| Debit Advertising Expense, Credit Cash |
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Term
| How it is handled: Cash is paid after the cost is incurred to gnerate revenue |
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Definition
| Debit Salaries Expense, Credit Salaries Payable |
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Term
| "Average" of Total Asset Turnover Ratio |
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Definition
| Beginning Balance + Ending Balance/2 |
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