Key Concepts in Accounting: A Comprehensive Review
Accounting Principles and Practices
Conceptual Framework
Accounting Principles Part I:
- Business Principle (Going Concern): The company operates for an unlimited time.
- Accrual Principle: Revenue and expenses are recognized when they are earned or incurred, regardless of when cash changes hands.
- Consistency Principle: Maintain consistent evaluation criteria over time.
- Principle of Conservatism (Prudence): Recognize potential losses when they are probable, but only recognize gains when they are realized.
Tax Dependency and Income: Key Concepts
Qualifying Child and Relative Tests
18) Which of the following relationships does NOT pass the relationship test for a qualifying child? C) Cousin.
19) Anna is a 21-year-old full-time college student (she plans on returning home at the end of the school year). Her total support for the year was $34,000 (including $8,000 of tuition). Anna covered $12,000 of her support costs out of her own pocket (from savings; she did not work), and she received an $8,000 scholarship that covered all of her tuition
Read MoreUnderstanding Functions and Their Properties
A function is a relation between two variables, such that for each value of the first variable (magnitude), there corresponds one and only one value of the second. The first variable is known as the independent variable. The dependent variable is the one whose values are determined from the values of the independent variable.
Key Concepts of Functions
- The domain of a function is the set of values of X for which there is a corresponding Y value (image).
- The range of a function is the set of Y values
Compustat Capitalization: Calculation and Applications
Unit 3: Compustat Capitalization
1. Calculating Capitalization in Compustat
We consider (1 + i)n a capitalization selection factor. In the case of Compustat capitalization, this factor shifts a given amount from one moment to a later one.
S (1 + I)NL-Factor updates the Compustat capitalization, shifting a given amount from one moment to an earlier one. That is, it shifts negative translations of capital.
2. Calculating Initial Capitalization in Compustat
Regardless of the capitalization regime applied,
Read MoreUnderstanding Legal, Economic, and Financial Concepts
Legal, Economic, and Financial Concepts
Legal: Patrimony provides for a set of goods, obligations, and rights, obtaining X. Unlike equity (Assets + Net + Rights = Patrimony + Obligations).
Economic: Financing = Liabilities (Capital + Liabilities). Inversion = Active (Real + Rights).
Financial: Expresses the set of assets, obligations, and rights as monetary equivalents. Assets = Liabilities, duly valued.
Accrual Accounting
Accrual is the application of accounting magnitudes to a concrete time period
Read MoreUnderstanding Market Research: Types and Methods
Understanding Market Research
Market research helps businesses understand consumer needs before developing and producing a product. Examples include primary and secondary research.
Quantitative Data
Quantitative data provides information about the quantity of something. For example, how many customers buy cola?
Qualitative Data
Qualitative data provides information about opinions or judgments. For example, why do customers like cola?
Sampling Methods
Sampling methods are used to select a representative
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