| Term | Definition |
|---|
| primary financial statements | the balance sheet income statement, and statement of cash flows, used by external groups to assess a company's economic standing |
| balance sheet (statement of financial position) | the financial statement that reports a company's assets, liabilities, and owners' equity at a particular date |
| income statement (statement of earnings) | the financial statement that reports the amount of net income earned by a company during a period |
| statement of cash flows | the financial statement that reports the amount of cash collected and paid out by a company during a period of time |
| assets | economic resources that are owned or controlled by a company |
| liabilities | obligations to pay cash, transfer other assets, or provide services to someone else |
| owner's equity | the ownership interest in the net assets of an entity; equals total assets minus total assets |
| net assets | the owner's equity of a business; equal to total assets minus total liabilities |
| stockholders (shareholders) | the owners of a corporation |
| stockholders' equity | the owners' equity section of a corporate balance sheet |
| dividends | distributions to the owners (stockholders) of a corporation |
| retained earnings | the amount of accumulated earnings of the business that have not been distributed to owners |
| capital stock | the portion of a corporation's owners' equity contributed by owners in exchange for shares of stock |
| accounting equation | an algebraic equation expresses the relationship between assets (resources), liabilities (obligations), and owners' equity (net assets, or residual interest in a business after all liabiliites have ben met): Assets = Liabilities + Owner's Equity |
| double-entry accounting | a system of recording transactions in a way that maintains the equality of the accounting equation |
| book value | the value of a company as measured by the amount of owner's equity: that is assets less liabilities |
| revenue | increase in a company's resources from the sale of goods or services |
| expenses | costs incurred in the normal course of buiness to generate revenues |
| net income (net los) | an overal measure of teh performance of a company; equal to revenues minues expenses for the period |
| gross profit (gross margin) | the excess of net sales revenue over the cost of goods sold |
| gains (loss) | money made or lost on activities outside the normal operation of a company |
| earnings (loss) per share (EPS) | the amount of net income (earnings) |
Combine with other sets
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