Upgrade to remove ads
Accounting 1 Terms: Ch. 2
Terms in this set (20)
Classified balance sheet
A balance sheet that groups together similar assets and similar liabilities, using a number of standard classifications and sections.
Constraint that weighs the cost that companies will incur to provide the information against the benefit that financial statement users will gain from having the information available.
Assets that companies expect to convert to cash or use up within one year or the operating cycle, whichever is longer.
Obligations that a company expects to pay within the next year or operating cycle, whichever is longer.
A measure of liquidity computed as current assets divided by current liabilities.
Debt to assets ratio
A measure of solvency calculated as total liabilities divided by total assets. It measures the percentage of total financing provided by creditors.
Earnings per share (EPS)
A measure of the net income earned on each share of common stock; computed as net income minus preferred dividends divided by the average number of common shared outstanding during the year.
Assets that o not have physical substance.
The ability of a company to pay obligations that are expected to become due within the next year or operating cycle.
Measures of the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash.
1. Investments in stocks and bonds of other corporations that companies hold for more than one year.
2. Long-term assets such as land/buildings, not currently being used in the company's operations.
3. Long-term notes receivable.
Long-term liabilities (long-term debt)
Obligations that a company expects to pay after one year.
The average time required to purchase inventory, sell it on account, and then collect cash form customers (go from cash to cash).
Measures of the operating success of a company for a given period of time.
Property, plant, and equipment
Assets with relatively long useful lives that are currently used in operating the business.
A technique that expresses the relationship among selected items of financial statement data.
The ability of a company to pay interest as it comes due and o repay the balance of debt due at its maturity.
Measures of the ability of the company to survive over a long period of time.
Statement of stockholders' equity
A financial statement that present the causes of changes to stockholders' equity during the period, including those that caused retained earnings to change.
The difference between the amounts of currents assets and current liabilities.
THIS SET IS OFTEN IN FOLDERS WITH...
Chapter 01 Practice
Accounting I - Chapter 2
Financial Accounting Chapter 2
ACCT Exam 1
YOU MIGHT ALSO LIKE...
AICS 2115 Ch 2
ACCT Ch. 2
Accounting chapter 2 definitions
OTHER SETS BY THIS CREATOR
Astronomy Exam #6 MTSU (Wallin)
Astronomy Exam 5 MTSU (Wallin)
Digital Marketing Pre-Course Review
Geology Final Exam
OTHER QUIZLET SETS
HB337: Final Exam
Funds Ch 6