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HBX CORe Financial Accounting Terms LATEST update already graded A+
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HBX CORe Financial Accounting Terms LATEST update already graded A+
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HBX COReFinancial
Accounting
Terms LATEST
update already
graded A+
Accelerated Depreciation Methods - answer
Depreciation methods that recognize more
depreciation expense in the early years and
less in the later years. Double-declining
balance is an example of an accelerated
depreciation method.
Accounting Equation - answer Assets =
Liabilities + Owners' Equity. This equation is
,fundamental and must always be true in
double entry accounting.
Accounting Period - answer The period of
time for which the financial results are
reported; typically either a month or a
quarter or a year.
Accounts Payable - answer Liability account
used to show the obligation to pay suppliers
who have provided goods or services on
credit terms.
Accounts Payable Turnover - answer Accounts
Payable Turnover is a ratio that is used to
measure how efficiently a business is paying
its vendors. It is calculated by dividing the
credit purchases for the period by the
average accounts payable balance for the
period. In the absence of credit purchases
information, we may use cost of goods sold
as a substitute. The ratio represents how
many times the accounts payable turned over
during the period. For most ratios in this
course, we use averages when calculating
ratios with balance sheet numbers, but this is
,not necessary and some may choose to use
beginning or ending balances.
Accounts Receivable - answer Asset account
used to show the claim to receive cash at
some future date for goods or services that
have been supplied to a customer on credit
terms.
Accounts Receivable Turnover - answer
Accounts Receivable Turnover is a ratio that
is used to measure how efficiently a business
is collecting receivables from its customers.
It is calculated by dividing the credit sales for
the period by the average accounts
receivable balance for the period. In the
absence of credit sales information, we may
use total sales as a substitute. The ratio
represents how many times the accounts
receivable turned over during the period. For
most ratios in this course, we use averages
when calculating ratios with balance sheet
numbers, but this is not necessary and some
may choose to use beginning or ending
balances.
, Accrual - answer A revenue amount that is
recorded after the revenue is earned but
before the payment is received or an expense
amount that is recorded after it has been
incurred but before the payment has been
made. In either case, for an accrual the
exchange of cash is expected at some future
point after the initial revenue or expense is
recognized.
Accrual Accounting Method - answer This is
the accounting method taught in this course,
followed by most companies, and required
under US GAAP and IFRS. The method follows
the revenue recognition principle, which says
that revenue should be recognized in the
period in which it is earned and realizable,
not necessarily when the cash is received
and the matching principle which says that
expenses should be recognized in the period
in which the related revenue is recognized
rather than when the related cash is paid.
Accrued Expenses - answer Liability account
used to record amounts at the end of an
accounting period to recognize expenses that
were incurred in the period but for which no
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