It goes down in value????
What is an estimate of how fast an asset loses value
Deprciation
Canceling the balance of a non-paying credit customer is called__________
Writing off an account
Physical inventory counting, weighing, or measuring items of merchandise on hand; COGS not knownuntil end
Periodic Inventory
Two or more persons operating as co-owners
Partnership
Partner's Assets invested in the company are recorded at ___________.
Market balue
What is the one asset that does NOT depreciate
land
Revenue was earned when the sale was made
Realization of Revenue
Determined by keeping a continueous record of increase, decrease, and amount on hand, corrected per the actual periodic inventory
Perpetual Inventory
Each partner has seperate_________ and a sepearate ___________ account
Capital
Drawing
represents a part of the cost of an asset that a business expects to recover
Salvage Value
What is called when an asset has been depreciated down to its salvage value
Fulled decreciated
AR that cannot be collected are
Uncollectible accounts
doubtful accounts
bad debts
The accuracy of the inventory amount assures that gross profit and net income are reported correctly
Adequate Disclosure
Each partner is personally liable for partnership's debts
Unlimited Liability
Why is the useful life of an asset limited
Obsolete
Not Needed
What is spread over several accounting periods as expense
Asset Cost
True or False:
Book balue of AR ddoes not change when writing off an account using the allowance method,
True
used to show kind of merchandise, qty rec'd, qty sold, and balance
A stock record
Partnerships end at death, withdrawal, bankruptcy, or incapacity of any partner, or when time period or purpose of the partnership expires
Limited life
Elements of a Written Partnership Agreement
Name and address
location
date of agreement
investments
dutiteis and rights
amount of withdrawals
sharing profits and losses
if bought___________, assets are depreciated over useful life PLUS ONE year; fraction 1st year and fraction last year
Mid-year
How do you reinstate an account?
Reverse the original entry in the General Journal
DR Cash
CR AR customer
FIFO?
First in first out
Each partner's decisions is binding upon the other partners
Mutual Agency
What two factos affect useful life
Physical depreciation
Functional Depreciation
What are the two types of assets
Current and Plant
used for larger businesses with more AR an estimate is made at the end of each fiscal period and becomes part of a new adjustment
Allowance Method
LIFO?
Last in First out
True or False:
A partner can transfer his interest without consent of the other partner
False
What day of the month determines when you count the month or not in depreciation
15th
Normal balance side of Gain/Loss on Sale of Assets
No Normal balance
used for businesses with few AR accounts when an account is determined to be uncollectible
Direct Write Off Method
GP div by NS=% then multiply that percentage times the next year's NS to get GP; then solve for EI
Gross Profit Method of Estimating Inventory
Partnerships themselves do not pay taxes because why?
Each partner must pay income taxes on their share of the business's net income.
The Income Statement may have a division of net income section or a _____________.
Distribution of Net Income Statement
Recording depreciation is what principle
Matching
DR Bad Debt Expense
CR AR Customer
Direct Write Off Method
DR Mdse Inventory
CR Cash(A/P)
PIM Purchases
Individual partners no longer own the assets they invested
Co-Ownership of Property
The largest asset of a merchandising business is reported
Merchandise Inventory
100% /#years ULx2xBV=Deprecation for year
Double Declingin Balance
computing amount becomes the end of balance of AUA subtracting existing balance of AUA to get adjustment amount
Aging of AR
DR Cash (AR)
CR Sales
DR COGS
CR M-Inv
PIM Sale
a law that governs partnerships in most states
The Revised Uniform Partnership Act
4 Factors that affect Depreciation
1. Cost
2. Depreciation method
3. Estimated useful life
4. Estimated disposal vlaue
Cost-SV=DV/UL=AD/12x#Months
Straight line Deprection
Charge customers' accounts that are declared uncollectible, do not decrease________
Revenue
would be used to record inventory at market value
Conservatism principle
Procedure for sharing profits and losses
b. fractional share basis
c. captial investments
2. All gains for noncash assets are added to capital
3. All partnership creditors are paid
4. Cash remaining is distributed to partners.