Cash
A small box containing a small amount of cash, and used for disbursements too small to be worth the normal cash disbursements paperwork.
What is Petty Cash?
This balance sheet account holds the value of purchased merchandise (and its incoming freight) until the goods are sold.
What is the Inventory account?
A reduction in assets, caused by the normal operation of the business, is usually this.
What is an Expense?
Net Income divided by Number of Shares Outstanding.
What is Earnings per Share (or EPS)?
Prepaid Rent appears under this major section of the Balance Sheet.
What is the “Asset” section?
A credit to cash indicates the cash balance has done this.
What is a Decrease in the cash balance?
When merchandise is sold on terms of Net 30, you debit this account for the amount charged to the customer.
What is “Accounts Receivable”?
Alpha Corp. loans money to Zulu Co.; Zulu gives Alpha this document, which can then be freely traded on the secondary market.
What is a Marketable Security (or Debt Security)?
Current Assets divided by Current Liabilities
What is the Current Ratio?
Allowance for Bad Debt appears under this major section of the Balance Sheet.
What are “Assets”?
When you pay an expense, you record this half of an entry to the cash account.
What is “Credit”?
When merchandise is sold, you debit this account for the cost of the products which went out the door with the customer.
What is “Cost of Goods Sold”?
The most liquid asset of all.
What is Cash?
Cost of Goods Sold divided by Inventory.
What is Inventory Turnover?
Warranty Obligations appears under this major section of the Balance Sheet.
What is the “Liabilities” section of the Balance Sheet?
The bank issues this type of memo to notify you that they have reduced your checking account balance.
What is a Debit Memo?
When you sell merchandise, you credit this account for the amount charged the customer.
What is Revenue?
When a company sells on credit, it uses this account to set aside an amount in expectation that some or all of the receivable will eventually become uncollectible.
What is “Allowance for Bad Debt”.
Sales divided by Accounts Receivable.
What is A/R Turnover?
Unearned Revenue appears under this major section of the Balance Sheet.
What is the “Liability” section of the Balance Sheet?
The name of the account used to write-off small cash account errors, when those errors are too small and immaterial to be worth the time needed to investigate them.
What is “Cash Short and Over”?
When a company sells merchandise, it credits this account for the cost of the goods that went out the door with the customer.
What is the Inventory account?
One of the three methods of Accelerated Depreciation mentioned in class.
What is Sum-of-Years-Digits, OR Double-Declining Balance, OR MACRS?
This ratio is 365 divided by A/R Turnover.
What is Average Days to Collect?
Unrealized Gain on Available for Sale Securities is reported under this major section of the Balance Sheet.
What is the “Equity” section of the Balance Sheet?