Preview

Acc 100 Chapter 3

Satisfactory Essays
Open Document
Open Document
393 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Acc 100 Chapter 3
ACC-100
Chapter 3

External event: involves interactions between the entity and its environment. * Example: the payment of wages to an employee is an external event, hiring of a sales manager
Internal event: occurs entirely within the entity. * The use of a piece of equipment
Transaction: any event that is recognized in a set of financial statements (if an event is measurable and realized, then it is a transaction) * Typically include: * An external event that involves exchange of assets, liabilities between the entity and external parties. Like, paying a monthly utility bill, selling merchandise to a customer * An internal event, where the effects on the entity can be reliably measured. Like sing equipment to manufacture a product, incurring losses to natural disaster
Source document: a piece of paper that is used as evidence to record a transaction * Any invoice received from a supplier is the source document for a purchase of inventory on credit
An inflow of assets resulting from the sale of goods and services by a business is called “revenue”. An increase in revenue will cause an increase in the income period, which in turn results in an increase in the retained earnings.
Accounts receivable: a promise from a customer to pay an amount owed (asset)
If an agreement to rent out a space is agreed upon and the customers say they will pay later, an accounts receivable is incurred. However, the supposed use of the facilities in this transaction has not yet been provided. Thus, instead of revenue, a liability is increased.
Expense: consumption of assets to generate revenue
When an accounts receivable is paid, cash increases and accounts receivable decreases
Dividends: when dividends are paid, cash and retained earnings decrease * Dividends are not an expense but a direct reduction of retained earnings
Asset: something that the firm owns that has future value
Liability: an obligation owed by the company
Equity: what’s

You May Also Find These Documents Helpful

  • Satisfactory Essays

    ACC205 Week 1 Assignment

    • 1409 Words
    • 34 Pages

    The following items appeared in the accounting records of Triguero's, a retail music store that also sponsors concerts.…

    • 1409 Words
    • 34 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Acct 598 Final paper

    • 307 Words
    • 2 Pages

    Class Act has concluded that the full agreement consideration of $5 million should be recorded as revenue upon signing the agreement. I do not think this is appropriate method to recognize revenue. According to FASB, a company would apply the following five steps to achieve the core principle: (1) identify contract with the customer. (2) Identify separate performance obligations. (3) Determine transaction price. (4) Allocate transaction price. (5) Recognize revenue when performance obligation is satisfied. Class Act recognized all $5 million up signing the agreement, how about if the performance of Broadway Venues doesn’t satisfy the agreement. The article shows that the agreement is silent as to whether any payments are refundable if the tour never commences.…

    • 307 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    CE 10-1: Research Memo

    • 562 Words
    • 3 Pages

    An unconditional transfer of cash or other assets to an entity or a settlement or cancellation of its liabilities…

    • 562 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    ACC 330 FINAL EXAM 1

    • 537 Words
    • 3 Pages

    6. Determine whether Nathan’s care provider is a dependent and explain why or why not?…

    • 537 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    A transaction is an elementary activity conducted during business operations. Transaction processing systems (TPS) process the company's business transactions and thus support the operations of an enterprise. A TPS records a non-inquiry transaction itself, as well as all of its effects, in the database and produces documents relating to the transaction.…

    • 545 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    b. The acquisition of an asset or a group of assets that does not constitute a business or a nonprofit activity…

    • 615 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    3. A principal auditor decides to take responsibility for the work of another CPA who audited a wholly owned subsidiary of the entity and issued an unqualified opinion. The total assets and revenues of the subsidiary represent 17 percent and 18 percent, respectively, for the total assets and revenues of the entity being audited.…

    • 395 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    ACC 470

    • 1397 Words
    • 6 Pages

    Occurrence & Rights & Obligations: disclosed events, transactions, and other matters have occurred and pertain to the entity…

    • 1397 Words
    • 6 Pages
    Good Essays
  • Powerful Essays

    Database and Page Ref

    • 4307 Words
    • 19 Pages

    11) A transaction is a series of actions to be taken on the database such that either all of them are performed successfully or none of them is performed at all.…

    • 4307 Words
    • 19 Pages
    Powerful Essays
  • Good Essays

    Accounting statements and ratios provide a great deal of information about a company’s financial stability. Some of the concepts to be discussed in further detail include horizontal analysis, current ratio, quick ratio, and cash to current liabilities ratio. A horizontal analysis is used to compare data from two or more periods side by side. The current ratio reveals the relative amount of working capital by dividing current assets by current liabilities. A quick ratio is calculated by dividing the assets by the current liabilities. This paper will examine the financial standing of Apple, INC and provide recommendations on how to better improve their financial gains in the future.…

    • 672 Words
    • 10 Pages
    Good Essays
  • Good Essays

    Worldcom Case

    • 708 Words
    • 3 Pages

    Expenses are outflows or other using up of assets or incurrence of liabilities (or a combination of both) from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major or central operations. Expenses are actual or expected cash outflows that have occurred of will occur as a result of the entity’s central operations. Cost of the goods sold, interest, rent, salaries, depreciation may be given as examples.…

    • 708 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Accounting for Income Tax

    • 694 Words
    • 3 Pages

    • the accounting treatment of the tax consequences of various transactions and events, including asset revaluations;…

    • 694 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    * Process of Recognising, measuring, recording (also known as transactions), disclosing and attesting to information.…

    • 2525 Words
    • 11 Pages
    Powerful Essays
  • Satisfactory Essays

    buisness

    • 343 Words
    • 2 Pages

    www.hktdc.comThe accounting definition of a business transaction, according to the online Business Dictionary, is "an economic event that initiates the accounting process of recording it in a company's accounting system." This is the official definition. However, selling an item at a garage sale where no accounting system is in place also can be a business transaction.…

    • 343 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    2. Which of the following basic elements are directly related to the measurement of financial position?…

    • 2914 Words
    • 12 Pages
    Satisfactory Essays