1. Define the following terms: (Chapter 14) a. Accounting b. Accrual basis of accounting c. Asset...

1. Define the following terms: (Chapter 14)

a. Accounting

b. Accrual basis of accounting

c. Asset management

d. Capital budget

e. Cash basis of accounting

f. Cash flow g. Financial accounting

h. Liquidity

i. Managerial accounting

j. Operating budget

Solutions

Expert Solution

a. Accounting - Accounting generates information/data relating to operations/activities of the firm. The end product of accounting constitutes financial statements such as the balance sheet, the income statement and the statement of changes in financial positions and sources and uses/cash flow statement of funds.

b. Accrual basis of accounting - It is a method of accounting, recognises revenue at the point of sale and expenses when they are incurred.

c. Assets management - Assets management is the process of ensuring that a company's tangible and intangible assets are maintained, accounted for, and put to their highest and best use.

d. Capital budget - Capital budgeting is the process of evaluating and selecting long term investments that are consistent with the goal of shareholders (owners) wealth maximisation.

e.Cash basis of accounting - this basis of accounting generally maintain by charitable institution and govt. in this accounting, only cash receipt and disbursement has shown in financial statements.

f. Cash flow - Cash flow statement is a statement which indicates sources of cash inflows and transaction of cash outflow of a firm during an accounting period. The activities /transactions which generates cash inflows are known as sources of cash and activities which cause cash outflows are known as uses of cash.

h. Liquidity - Liquidity is the ability to transform a security into cash.

i. managerial Accounting - managerial accounting is the process of identifying, measuring, analyzing, interpreting and communicating information to managers for the pursuit of an organization goals.

j. Operating Budgets - Operating budget relates to physical activities/operations such as sales, production and so on.

Please go through these definations and let me know.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Completely and Precisely Define the Following Terms The accrual basis of accounting: The Matching principle: Name...

Completely and Precisely Define the Following Terms The accrual basis of accounting: The Matching principle: Name and define one type of adjusting entry where cash is paid (or received) BEFORE Expenses or Revenues are Recognized: Name and Define one type of adjusting entry where cash is paid (or received) AFTER Expenses or Revenue are Recognized: Adjusted Trial balance:

Cash Basis vs. Accrual Basis Accounting Differentiate between cash-basis accounting and accrual-basis accounting. Why is accrual-basis...

Cash Basis vs. Accrual Basis Accounting Differentiate between cash-basis accounting and accrual-basis accounting. Why is accrual-basis accounting the preferred method for most businesses? The Internal Revenue Service requires all companies with sales over $5,000,000 to use the accrual-basis of accounting for income tax reporting purposes. Why?

Chapter Four: Accrual Accounting Concepts 1. What is the difference between the cash basis of accounting...

Chapter Four: Accrual Accounting Concepts 1. What is the difference between the cash basis of accounting and the accrual basis of accounting? 2. What kinds of companies use the accrual basis of accounting? 3. What is the revenue recognition principle? 4. What is the expense recognition principle? 5. Why are adjusting journal entries (adjustments) made? 6. What are unexpired costs? What are expired costs? What causes a cost to become expired? 7. On which financial statement does one find unexpired...

1. B&B Corporations are on the accrual basis of accounting, revenue should be recognized on the...

1. B&B Corporations are on the accrual basis of accounting, revenue should be recognized on the Income Statement when: A. Cash is received B. Revenue is earned and collectability of any cash is reasonably assured C. Revenue is earned regardless of the collectability of any uncollected cash D. Revenue is earned even if the full sales price is uncertain 2. B&B Tech disclosed the following information in its recent annual report: Year 1 Year 2 Cost of goods sold $16,000,000 $20,100,000 Revenue 20,000,000 25,100,000...

Distinguish between cash-basis accounting and accrual-basis accounting. Why is accrual-basis accounting accept-able for most businesses and...

Distinguish between cash-basis accounting and accrual-basis accounting. Why is accrual-basis accounting accept-able for most businesses and the cash-basis unacceptable in the preparation of an income statement and a balance sheet?

Cash basis accounting versus accrual basis accounting: Given the following information On August 1, Richardson Company...

Cash basis accounting versus accrual basis accounting: Given the following information On August 1, Richardson Company received $9,300 for six months of rent in advance. Accrual accounting affects the Income Statement and the Balance Sheet. Consider the information above. Construct an Income Statement for August 30 and December 31 using only cash basis accounting and then another statement for August 30 and December 31 using accrual accounting. Discuss the differences between the two August 30 Income Statements and the December...

Why is accrual basis accounting superior to cash basis accounting?

1. Accrual basis of accounting primarily refers to the ____________________ principle.

1. Accrual basis of accounting primarily refers to the ____________________ principle. a) Going concern b) Matching c) Cost d) Conservatism 2. Which one of the following transaction requires no change in total assets? a) Purchase of an equipment with cash borrowed from a bank b) Paying cash to reduce an outstanding accounts payable c) Investing cash to start up the business d) Collecting a monthly installment due from a credit sale from customers

Differentiate between cash basis accounting and accrual basis accounting. Why do more businesses use accrual basis?...

Differentiate between cash basis accounting and accrual basis accounting. Why do more businesses use accrual basis? What are some of the accounting principles and concepts that influence the four financial statements all business organization create each financial period?

Compute Al’s gross income for 2018: a. Using the cash basis of accounting. b. Using the accrual basis of accounting.

Al is a medical doctor who conducts his practice as a sole proprietor. During 2018, he received cash of $280,000 for medical services. Of the amount collected, $40,000 was for services provided in 2017. At the end of 2018, Al had accounts receivable of $60,000, all for services rendered in 2018. In addition, at the end of the year, Al received $12,000 as an advance payment from a health maintenance organization (HMO) for services to lx? rendered in 2019- Compute Al’s gross...

Subjects