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54 terms

accounting

STUDY
PLAY
payments of a liability
credits cash debits accounts payable
DEALER
dividends expense asset liabilities equity revenue
comparibility
when different firms use the same accounting principle
consistency
company uses same accounting principles from period to period
cost principle
liabilities to be recorded at original cost
full disclosure principle
report what a reasonable person needs to know in order to make and informed decision
conservatism
company should choose the accounting method that will least likely overstate assets or income
cash and supplies are both classified as current assets?
true
buliding offered at 10 someone buys for 9 the would record as 10?
false
materiality
an item is material if it can influence the decision of an investor or creditor
the normal balance of a dividend account is a credit?
false
dividends appear on?
retained earnings statement
statement of cash flows
Operating activities, investing activities, finance activities
most important information to determine if companies can pay there current obligations
going concern assumption
receiving payment of a portion of accounts receviable will?
raise assets lower liabilities
what is not an advantage of corporate form of business
double taxation
GAAP
how info shud be recorded, what shud be disclosed, how should info be disclosed, what financial statements should be prepared
time period assumption
allows the business to be divided into artificial time periods like months quarters or years
balance sheet
statement that reports the assets and claims to those assets at a specific point in time
basic accounting equation
A= L + SE
CPA
mety certain criteria and is allowed to perform audits on certain corporations
common stock
total about paid in by stockholders for the shares they purchase
comparitive statements
a presentation of a companys financial statements for more than 1 year
corporation
business that has ownership divided into transferable shares
dividends
payments of cash to stockholders
expenses
the cost of assets consumed or services used in the process of generating revenue
income statement
presents revenues and expenses and resulting net income or net loss of a company for a specific period
liabilities
debts and obligations of a business. liabilities equals amount owed to creditors
net income
the amount where revenue exceeds expenses
net loss
expenses exceed revenue
notes to the financial statement
notes that clarify info presented in financial statement
partnership
business owned by two or more people
retained earnings
amount of net income retained in the corporation
retained earnings statement
summarizes the amounts and causes of changes in retained earnings for a specific period of time
revenue
increase in assets that result from the sale of a product or service in the normal course of business
sarbanes oxley act
passed by congress to reduce unethical corporate behavior
sole proprietorship
business owned by one person
statement of cash flows
provides financial information about the cash receipts and cash payments of a business for a specific period of time
stockholders equity
the owners claim on total assets
which accounts have credit balances
liabilities accoutns
trial balance is a listing of?
names and balances of all the accounts in the order in which they appear
if total liabilities increase then?
total assets increase
if services are rendered for cash
?
working capital
current assets- current liabilities
current ratio
current assets/ current liabilities
debt to total assets ration
liabilities/ total assets
earnings per share
net income - preffered dividends/ # of shares
revenue recognition principle
when it is earned without regard to when the payment is received
statements of cash flows begins with cash flows from?
the beggining balance
Monetary Unit Assumption
only trabsactions in terms of money be included in accounting records
economic entity assumption
economic events can be identified with a particular unit of accountability
time period assumption
business to be divided into artificial time periods
going concern assumption
assumes business will be in operation in the forseable future
collection of an account receiveable
credits accounts recevable debits cash