Crystal Durruty

ACCT110

Homework Week 2
14. Cost Principle
15. It can mean the difference between a large bonus or being let go. From a stockholders
perspective, it could mean the difference between selling or holding a stake in a company. The
most common measure used to gauge whether one has met targets is revenue. Revenue typically
drives the success of most businesses, as it is a means of generating profits and increasing equity.
For this reason, attaining proper revenue recognition is paramount.
16. Sole Proprietorship: A sole proprietorship is the simplest form of business. It is an
unincorporated business owned by one individual. Going into business as a sole proprietor is
easyone merely begins business operations. However, even the smallest businesses normally
must be licensed by a governmental unit.
Partnership: A partnership exists whenever two or more persons associate to conduct a noncorporate business. Partnerships may operate under different degrees of formality, ranging from
informal, oral understandings to formal agreements
filed with the secretary of the state in which the partnership was formed.

Corporation: A corporation is the complex and biggest form of business. It is a legal entity
created by a state, and it is separate and distinct from its owners and managers.

17. Assets: Items of ownership convertible into cash; total resources of a person or business, as
cash, notes and accounts receivable, securities, inventories, goodwill, fixtures, machinery, or real
estate.
Liabilities: Moneys owed; debts or pecuniary obligations
Equity: The monetary value of a property or business beyond any amounts owed on it in
mortgages, claims, liens, etc.
Net Assets: The total assets of a business minus its total liabilities.

18. Comprehensive income and all changes in equity from transfers between the enterprise and
its owners.

19. General and Specific

20. The amount which, as a result of operations (sale of goods) or services, is added to the
capital. Revenue is gross inflow of cash, receivables or other consideration arising in the course
of ordinary activities of the enterprise from the sale of goods from rendering of services and from
the use by others of enterprise resources yielding interest, dividends, etc.

21. What remains after subtracting all the costs (namely cost of business, depreciation, interest,
and taxes) from a company's revenues. Net income is sometimes called the bottom line. It can
also be called earnings or net profit.
Calculate your gross annual income
Subtract any deductions you have
Deduct your retirement contributions if applicable
Deduct your medical and dental expenses if applicable
Subtract what you owe in taxes from your annual pay

22. Income Statement, Balance Sheet, Statement of owners equity, Statement of cash flows

23. Revenues and Gains, Expenses and Losses

24. Rent and utilities

25. It shows all the changes to the owners equity that have occurred during the period. These
changes comprise capital, drawings and the profit for the period.

26. How much a company owns (its assets) and how much it owes (its liabilities). The difference
is its equity also commonly called net assets, stockholder's equity, or net worth.

QS 1-15
ROH=Net Income/Average total assets
$3338/$40501= 8.2%

QS 1-16
1. International Financial Reporting Standards
2. To adopt compatible, high-quality solutions to existing and future accounting issues.

QS 1-12
D, A, G, C

Problem 1-2A
NEED HELP!!