Solution Manual for Accounting What The Numbers Mean,
13th Edition By David Marshall
account - ANSWER:A record in which transactions affecting individual assets,
liabilities, owners' equity, revenues, and expenses are recorded.
accounting equation - ANSWER:Assets = Liabilities + Owners' Equity (A = L + OE). The
fundamental relationship represented by the Balance Sheet and the foundation of
the bookkeeping process.
accounts payable - ANSWER:A liability representing an amount payable to another
entity, usually arising because of the purchase of goods or services on credit.
accounts receivable - ANSWER:A liability representing an amount payable to another
entity, usually arising from selling goods or services on credit.
accrual accounting - ANSWER:Accounting that recognizes revenues and expenses as
they occur, even though the cash receipt from the revenue or the cash disbursement
related to the expense may occur before or after the the event that causes the
revenue or expense recognition.
accrued liabilities - ANSWER:Amounts that are owed by an entity on the balance
sheet date.
accumulated depreciation - ANSWER:The sum of the depreciation expense that has
been recognized over time. Accumulated depreciation is a contra-asst---an amount
that is subtracted from the cost of the related asset on the balance sheet.
additional paid-in capital - ANSWER:The excess of the amount received from the sale
of stock over the par value of the shares sold.
assets - ANSWER:Probable future economic benefits obtained or controlled by an
entity as a result of past transactions or events.
balance sheet - ANSWER:The financial statement that is a listing of the entity's
assets, liabilities and owners' equity at a point in time.
balance sheet equation - ANSWER:Another term for the "accounting equation".
cash - ANSWER:An asset on the balance sheet that represents that amount of cash
on hand an balances in bank accounts maintained by the entity.
common stock - ANSWER:The class of stock that represents residual ownership if the
corporation.
, corporation - ANSWER:A form of organization in which ownership is evidences by
shares of stock owned by stockholders; its features, such as limited liability of the
stockholders, make this the principal form of business activity.
cost of goods sold - ANSWER:Cost of merchandise sold during the period; an expense
deducted from net sales to arrive at gross profit. A frequently used synonym is "cost
of sales".
current assets - ANSWER:Cash and those assets that are likely to be converted into
cash or used to benefit the entity within one year of the balance sheet date.
current liabilities - ANSWER:Those liabilities due to be paid within one year of the
balance sheet date.
depreciation - ANSWER:The accounting process of recognizing the cost of an asset
that is used up over its useful life to the entity.
depreciation expense - ANSWER:The expense recognized in a fiscal period for the
depreciation of an asset.
dividend - ANSWER:A distribution of earnings to the owners of a corporation.
earnings per share of common stock outstanding (EPS) - ANSWER:Net income
available to the common stockholders divided by the number of shares outstanding
during the period. Usually referred to simply as "EPS".
equity - ANSWER:The ownership right associated with an asset. See "owners'
equity".
expenses - ANSWER:Outflows or other using up of assets, or incurring a liability
during a period from delivering or producing goods, rendering services, or carrying
out other activities the constitute the entity's major operations (e.g. Income
Statement title "selling general, and administrative expense".)
fiscal year - ANSWER:The annual period used for reporting to owners (or
governmental agencies).
gains - ANSWER:Increases in net assets from incidental transactions that are not
revenues or investments by owners.
going concern concept - ANSWER:A presumption that the firm will continue in
existence for the indefinite future.
gross profit - ANSWER:Net sales less cost of goods sold. Sometimes called "gross
margin".
13th Edition By David Marshall
account - ANSWER:A record in which transactions affecting individual assets,
liabilities, owners' equity, revenues, and expenses are recorded.
accounting equation - ANSWER:Assets = Liabilities + Owners' Equity (A = L + OE). The
fundamental relationship represented by the Balance Sheet and the foundation of
the bookkeeping process.
accounts payable - ANSWER:A liability representing an amount payable to another
entity, usually arising because of the purchase of goods or services on credit.
accounts receivable - ANSWER:A liability representing an amount payable to another
entity, usually arising from selling goods or services on credit.
accrual accounting - ANSWER:Accounting that recognizes revenues and expenses as
they occur, even though the cash receipt from the revenue or the cash disbursement
related to the expense may occur before or after the the event that causes the
revenue or expense recognition.
accrued liabilities - ANSWER:Amounts that are owed by an entity on the balance
sheet date.
accumulated depreciation - ANSWER:The sum of the depreciation expense that has
been recognized over time. Accumulated depreciation is a contra-asst---an amount
that is subtracted from the cost of the related asset on the balance sheet.
additional paid-in capital - ANSWER:The excess of the amount received from the sale
of stock over the par value of the shares sold.
assets - ANSWER:Probable future economic benefits obtained or controlled by an
entity as a result of past transactions or events.
balance sheet - ANSWER:The financial statement that is a listing of the entity's
assets, liabilities and owners' equity at a point in time.
balance sheet equation - ANSWER:Another term for the "accounting equation".
cash - ANSWER:An asset on the balance sheet that represents that amount of cash
on hand an balances in bank accounts maintained by the entity.
common stock - ANSWER:The class of stock that represents residual ownership if the
corporation.
, corporation - ANSWER:A form of organization in which ownership is evidences by
shares of stock owned by stockholders; its features, such as limited liability of the
stockholders, make this the principal form of business activity.
cost of goods sold - ANSWER:Cost of merchandise sold during the period; an expense
deducted from net sales to arrive at gross profit. A frequently used synonym is "cost
of sales".
current assets - ANSWER:Cash and those assets that are likely to be converted into
cash or used to benefit the entity within one year of the balance sheet date.
current liabilities - ANSWER:Those liabilities due to be paid within one year of the
balance sheet date.
depreciation - ANSWER:The accounting process of recognizing the cost of an asset
that is used up over its useful life to the entity.
depreciation expense - ANSWER:The expense recognized in a fiscal period for the
depreciation of an asset.
dividend - ANSWER:A distribution of earnings to the owners of a corporation.
earnings per share of common stock outstanding (EPS) - ANSWER:Net income
available to the common stockholders divided by the number of shares outstanding
during the period. Usually referred to simply as "EPS".
equity - ANSWER:The ownership right associated with an asset. See "owners'
equity".
expenses - ANSWER:Outflows or other using up of assets, or incurring a liability
during a period from delivering or producing goods, rendering services, or carrying
out other activities the constitute the entity's major operations (e.g. Income
Statement title "selling general, and administrative expense".)
fiscal year - ANSWER:The annual period used for reporting to owners (or
governmental agencies).
gains - ANSWER:Increases in net assets from incidental transactions that are not
revenues or investments by owners.
going concern concept - ANSWER:A presumption that the firm will continue in
existence for the indefinite future.
gross profit - ANSWER:Net sales less cost of goods sold. Sometimes called "gross
margin".
