MGT401 Final Term Notes Set 2

Rana Abubakar Khan

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MGT401 FINAL TERM PAPER NOTES

cycle :

The procedures for analyzing, recording, classifying, summarizing, and reporting the transactions of a business.

account

payable :

An amount owed to a supplier for good or services purchased on credit; payment is due within a short time period, usually 30 days or less.

acid-test ratio

(or quick ratio)

A measure of a firm's ability to meet current liabilities; more restrictive than the current ratio, it is computed by dividing net quick assets (all current assets, except inventories and prepaid expenses) by current liabilities.

bad debt :

An uncollectible account receivable.

Deferred Income Taxes : · dividend · payment date :

The date on which a corporation pays dividends to its shareholders.

double-entry

A system of recording transactions in a way that maintains the equality of the accounting equation.

drawings

account :

The account used to reflect periodic withdrawals of earnings by the owner (proprietor) or owners (partners) of a proprietorship or partnership.

effective- · interest · amortization :

A method of systematically writing off a bond premium or discount that takes into consideration the time value of money and results in an equal rate of amortization for each period.

Financial · Standards · Board (FASB) :

The private organization responsible for establishing the standards for financial accounting and reporting in the United States.

FOB (free-on- · board) · destination :

A business term meaning that the seller of merchandise bears the shipping costs and maintains ownership until the merchandise is delivered to the buyer.

going concern : The idea that an accounting entity will have a continuing existence for the foreseeable future.

gross margin : The excess of net sales revenue over the cost of goods sold.

gross margin

method :

A procedure for estimating the amount of ending inventory; the historical relationship of cost of goods sold to sales revenue is used in computing ending inventory.

gross sales :

Total recorded sales before deducting any sales discounts or sales returns and allowances.

gross tax

liability :

The amount of tax computed by multiplying the tax base (taxable income) by the appropriate tax rates.

held-to- · maturity · securities :

Debt securities purchased by an investor with the intent of holding the securities until they mature. historical cost : The dollar amount originally exchanged in an arm's-length transaction; an amount assumed to reflect the fair market value of an item at the transaction date.

historical

exchange rate

The exchange rate that existed on the date of a transaction.

horizontal · analysis of · financial

A technique for analyzing the percentage change in individual income statement or balance sheet items from one year to the next.

imprest petty

cash fund :

A petty cash fund in which all expenditures are documented by vouchers or vendors' receipts or invoices, the total of the vouchers and cash in the fund should equal the established balance.

income · statement · earnings) :

The financial statement that summarizes the revenues generated and the expenses incurred by an entity during a period of time.

accrued

expenses :

Expenses that arise through adjusting entries when accounting for unrecorded expenses.

adjusted gross

income :

An individual taxpayer's total income minus deductions (adjustments) for individual retirement plan contributions and alimony paid.

adjustments to

gross income :

Amounts deducted from the gross income of an individual taxpayer in arriving at adjusted gross income; includes contributions to individual retirement plans and alimony paid.