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ACC 100 (214)
Chapter 1

CHAPTER 1.docx

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Department
Accounting
Course
ACC 100
Professor
Nick Iannazzo
Semester
Fall

Description
CHAPTER 1 Liabilities- amount owed to creditors in the form of debt and other obligations • When a company borrows money from a bank, its called a note payable • When a company sells bonds, the obligation is termed bonds payable • Amount owed to the government for taxes are called taxes payable • Account payable- is a file or account sub-ledger that records amounts that a person or company owes to suppliers, but has not paid yet (a form of debt). Capital Stock- indicates the owners’ contributions to a corporation(sold to the public) Common shares- is the term used to describe the amount paid by investors for shares of ownership in a company. Dividends- are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend. Assets-investing activities involve the purchase of the long lived resources Ex. Property, plant , and equipment and Investment Account Receivable- is one of a series of accounting transactions dealing with the billing of a customer for goods and services they have ordered. (right to receive money in the future) Revenue-amount earned from the sales of goods Ex. Sales revenue, service revenue, interest revenue Expenses- are the cost of assets that are consumed or services that are used in the process of generating revenues. Ex. Cost of sales, selling and administrative expenses, interest expense, income taxes Net earnings- revenues are more then expenses Net loss- expenses more then revenue Statement of earnings-a statement of earnings reports revenues and expenses to show how successfully a company performed during a period of time Statement of retained earnings- a statement of retained earnings indicates how much was distributed to yo
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