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50 Cards in this Set
- Front
- Back
Annual Report
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A report prepared by corporate management that presents financial information including financial statements, notes, a management discussion and analysis section, and an independent auditor's report
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Assets
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Resources owned by a business
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Auditors Report
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A report prepared by an independant outside auditor stating the auditors opinion as to the fairness if the presentation of the financial position and results of operations and thier conformance with generally accepted accounting standards
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Balance Sheet
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Reports the assets and claims to those assets at a specific point in time
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Basic Accounting Equation
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Assets = Liabilities + Stockholders Equity
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Common Stock
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Term used to describe the total amount paid in by stockholders for the shares they purchase
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Corporation
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Organized as a separate legal entity having ownership divided into transferable shares of stock
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Dividends
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Payments of cash from a corporation to its stockholders
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Income Statement
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Presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time
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Liabilities
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The debts and obligations of a business. Liabilities represent the amounts owed to creditors
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Partnership
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A business owned by two or more persons associated as partners
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Retained Earnings
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The amount of net income retained in the corporation
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Retained Earnings Statement
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Summarizes the amounts and causes of changes in retained earnings for a specific period of time
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Revenue
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The increase in assets that result from the sale of a product or service in the normal course of business
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Sarbanes Oxley Act
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Regulations passed by Congress in 2002 to try to reduce unethical corporate behavior
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Sole Proprietorship
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A business owned by one person
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Stockholders Equity
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The owners claim on total assets
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Conservatism
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The approach of choosing an accounting method, when alternatives exist, that will least likely overstate assets and net income
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Current Assets
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Cash and other resources that companies reasonably expect to convert to cash or use up within one year or the operating cycle, whichever is longer
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Current Liabilities
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Obligations that the company expects to pay within the next year or operating cycle
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Current Ratio
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A measure used to evaluate a company's liquidity and short term debt paying ability; computes as current assets divided by current liabilities
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Earnings Per Share
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Net Income minus preferred stock dividends divided by the average number of common shares outstanding during the year
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Economic Entity Assumption
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An assumption that every economic entity can be separately identified and accounted for
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Financial Accounting Standards Board (FASB)
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The primary accounting standard setting body in the united states
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Full disclosure principle
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Accounting principle that dictates that companies disclose circumstances and events that make a difference to financial statements
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Going Concern assumption
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The assumption that the company will continue in operation for the foreseeable future.
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Materiality
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The constraint of determining whether an item is large enough to likely influence the decision of an investor or creditor
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Monetary Unit Assumption
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An assumption that requires that only those things that can be expressed in money are included in the accounting records
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Property, Plant, and Equipment
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Assets with relatively long useful lives that companies use in operating the business and are not intended for resale
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Securities and Exchange Comission (SEC)
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The agency of the US government that overees US financial markets and accounting standard setting bodies
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Time Period Assumption
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An assumption that the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared for the business
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Working Capital
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The difference between the amounts of current assets and current liabilities.
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Chart of Accounts
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A list of a company's accounts
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Journal
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An accounting record in which transactions are initially recorded in chronological order
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Journalizing
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The procedure of entering transaction data in the journal
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Posting
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The procedure of transferring journal entry amounts to the ledger accounts
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T account
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The basic form of an account
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Trial Balance
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A list of accounts and their balances at a given time
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Credit
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The right side of the account
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Debit
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Left side of the account
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Book value
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The difference between the cost of a depreciable asset and its related accumulated depreciation.
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Closing Entries
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Entries at the end of accounting period to transfer the balances of temporary accounts to a permanent stockholders equity account, Retained Earnings
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Fiscal Year
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An accounting period that is one year long
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Permanent Accounts
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Balance sheet accounts whose balances are carried forward to the next accounting period
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Revenue recognition principle
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The principle that companies recognize revenue in the accounting period in which it is earned.
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Temporary Accounts
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Revenue, Expense, and dividend accounts whose balances a company transfers to Retained Earnings at the end of an accounting period
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Unearned Revenue
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Cash received before a company earns revenues and recorded as a liability until earned
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Useful Life
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The Length of service of a productive asset HOW TO FIGURE DEPRECIATION
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Profit Margin Ratio
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Measures the percentage of each dollar of sales that results in net income, computed by dividing net income by net sales
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Sales discount
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A reduction given by a seller for prompt payment of a credit sale.
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