Chapter 14-class Flashcards
an amount earned by a corporation and not yet distributed to stockholders
retained earnings
earnings distributed to stockholders
dividends
group of persons elected by the stockholders to manage a corporation
board of directors
dividends can only be distributed by formal action of board is example of accounting concept
business entity
amount of goods on hand for sale to customers
merchandise inventory
accounts receivable that cannot be collected
uncollectible accounts
crediting the estimated value of uncollectible accounts to a contra account
allowance method of recording losses from uncollectible accounts
difference between an asset’s account balance and its related contra account balance
book value
difference between the balance of Accounts Receivable and its contra account, Allowance for Uncollectible Accounts
book value of accounts receivable
cash and other assets expected to be exchanged for cash or consumed within a year
current assets
assets used for a number of years in the operation of business
plant assets
portion of a plant asset
s cost that is transferred to an expense account in each fiscal period funding a plant asset’s useful life
depreciation expense
amount an owner expects to receive when a plant asset is removed from use
estimated salvage value
charging an equal amount of depreciation expense for a plant asset in each year of useful life
straight-line method of depreciation
total amount of depreciation expense that has been recorded since the purchase of a plant asset
accumulated depreciation
