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Financial Accounting Test 1
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Fixed-Assets:
long term assets such as equipment, machinery, buildings,
and land.
1. Tangible, physical assets
2.Used in normal operations
3. Not offered for sale in normal operations
Lease:
a contract for the use of an asset for a period of time
Capital Lease
Accounted as if lessee has purchased asset. Debits an asset account for fair market value and credits
long-term liability account
Operating Lease
if lessee is renting the asset.
Debit Rent expense and credit Cash.
Depreciation:
periodic recording of cost of fixed assets as an expense
Debit Depreciation Expense and Credit Accumulated
Depreciation
-Include all assets’ initial costs/over useful life/estimate residual
value
Straight-Line Method:
=Cost- Residual Value/Useful Life
Units of Production:
Depreciation per unit=
cost-residual value/ total units of production
Double Declining Balance
Step 1: Straight line percentage x 2
Intangible Assets: Do not exist physically
Amortization
: decline in the usefulness of the intangible
assets
Debit
Amortization Expense and Credit the Intangible Asset
Fixed Asset Turnover Ratio
= Revenue/ avg.
book value of fixed assets
Long-term-Liabilities
are debt due beyond one year-paid back in installments
Short –Term Notes Payable
Note payable with interest on the amount of time.
Credit
Notes Payable and Interest Expense Debit Cash
Gross-Pay
Pay including overtime pay before deductions
Net-Pay
amount after deductions paid to the employee
FICA Tax
contributions to social security and medicare
Employer Taxes
SUTA Tax
FUTA Tax
SS Tax
Medicare Tax
Employee Taxes
Social Security Tax
Medicare Tax
Federal Witholding Tax
Quick Ratio
= quick assets/ current liabilities
Partnership
Partnership Agreement includes matters such as
amounts to be invested, limits on withdrawals distributions, admission and
withdrawal
No legal liability
Not Taxable
Limited Liability Company
Limited Legal Liability
Unlimited Life
Not taxable
Author
Anonymous
ID
27246
Card Set
Financial Accounting Test 1
Description
Long Term Liabilities, Fixed Assets, Payroll, and Partnerships and LLCs Fut
Updated
2010-07-18T21:49:03Z
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