Study sets matching "3 financial accounting income"

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Study sets matching "3 financial accounting income"

Chapter 3 Financial Accounting-Accrual Accounting & Income
Account Format
accrual
Accrual accounting
accrued expense
a balance sheet format that lists assets on the left and liab…
an expense or a revenue that occurs before the business pays…
accounting that records the impact of a business event as it…
an expense incurred but not yet paid in cash
Account Format
a balance sheet format that lists assets on the left and liab…
accrual
an expense or a revenue that occurs before the business pays…
53 terms
Financial Accounting: Chapter 3 - Accrual Accounting and Income
Accrual Accounting
Cash-basis accounting
Balance Sheet Defect
Time Period Concept
Records the impact of a business transaction as it occurs, ev…
Records only cash transactions - cash receipts and payments.
when the receivable represents a claim to receive cash in the…
The preparation of financial statements only for specific tim…
Accrual Accounting
Records the impact of a business transaction as it occurs, ev…
Cash-basis accounting
Records only cash transactions - cash receipts and payments.
Financial Accounting: Chapter 3 - Accrual Accounting and Income
Accrual Accounting
Cash-basis accounting
Balance Sheet Defect
Time Period Concept
Records the impact of a business transaction as it occurs, ev…
Records only cash transactions - cash receipts and payments.
when the receivable represents a claim to receive cash in the…
The preparation of financial statements only for specific tim…
Accrual Accounting
Records the impact of a business transaction as it occurs, ev…
Cash-basis accounting
Records only cash transactions - cash receipts and payments.
22 terms
Financial Accounting Ch. 3- The Income Statement
Operating Activities
Operating Activities
Operating Activities
Income Statement
The day-to-day functions involved in running a business.
Include buying good and services from the supplier and the em…
the primary sources of revenues and expenses, determining whe…
Summarizes the financial impact of operating activities durin…
Operating Activities
The day-to-day functions involved in running a business.
Operating Activities
Include buying good and services from the supplier and the em…
19 terms
Financial Accounting - income statement
purposes of income statement
revenue
expense
profit
1. report inflow and outflow of assets within a financial per…
inflow of economic benefits that arises from the ordinary ope…
outflow of economic benefits that arises from the ordinary op…
increase in wealth attributable to owners of the business tha…
purposes of income statement
1. report inflow and outflow of assets within a financial per…
revenue
inflow of economic benefits that arises from the ordinary ope…
12 terms
Financial Accounting: Income Statement
Income Statement (Statement of Operati…
Net Income Equation
Revenues
Gain
Reports a company's net income for a specified period of time.
Revenues & Gains - Expenses & Losses
Amounts earned, sales, service fees, interest earned.
Sale of a long-term asset for more than its carrying value.
Income Statement (Statement of Operati…
Reports a company's net income for a specified period of time.
Net Income Equation
Revenues & Gains - Expenses & Losses
Financial Accounting - Understanding Income Statements
Also known as the "Statement of Operat…
Basic income statement equation
Also known as sales or turnover
Net revenue
Income Statement
revenue - expenses = net income... or... Revenue + other income + g…
revenue refers to the amounts charged for the delivery of goo…
is revenue reported after adjustments (e.g. for returned item…
Also known as the "Statement of Operat…
Income Statement
Basic income statement equation
revenue - expenses = net income... or... Revenue + other income + g…
Financial 6 - Accounting for income taxes
Under current generally accepted accou…
Hut Co. has temporary taxable differen…
At December 31, Bren Co. had the follo…
Dodd Corp. is preparing its December 3…
Choice "c" is correct. The approach used in GAAP to determine…
Choice "b" is correct. Hut's temporary taxable differences ad…
Choice "d" is correct. Under U.S. GAAP, the noncurrent liabil…
Choice "d" is correct, $0 increase in net income. U.S. GAAP d…
Under current generally accepted accou…
Choice "c" is correct. The approach used in GAAP to determine…
Hut Co. has temporary taxable differen…
Choice "b" is correct. Hut's temporary taxable differences ad…
21 terms
Financial 6 - Accounting for income taxes
Under current generally accepted accou…
Hut Co. has temporary taxable differen…
At December 31, Bren Co. had the follo…
Dodd Corp. is preparing its December 3…
Choice "c" is correct. The approach used in GAAP to determine…
Choice "b" is correct. Hut's temporary taxable differences ad…
Choice "d" is correct. Under U.S. GAAP, the noncurrent liabil…
Choice "d" is correct, $0 increase in net income. U.S. GAAP d…
Under current generally accepted accou…
Choice "c" is correct. The approach used in GAAP to determine…
Hut Co. has temporary taxable differen…
Choice "b" is correct. Hut's temporary taxable differences ad…
31 terms
Financial 6: Income Tax Accounting
Intraperiod allocation
IDA PUFER
General Rule for Intraperiod Allocation
Objective of Interperiod tax allocation
matches a portion of the provision for income tax to the appl…
I-income from continuing operations... D- discontinued operation…
Any amount not allocated to continuing operations is allocate…
To regains through the matching principle the amount of curre…
Intraperiod allocation
matches a portion of the provision for income tax to the appl…
IDA PUFER
I-income from continuing operations... D- discontinued operation…
29 terms
3: Accrual Accounting & Income
Accrual accounting
Cash basis accounting
Accrual accounting records the followi…
Accrual accounting records the followi…
Records impact of transactions when they occur. Required by t…
Records only cash transactions such as cash receipts and cash…
Collecting cash from customers.... Receiving cash from interest…
Sales on account.... Purchases of inventory on account.... Accrual…
Accrual accounting
Records impact of transactions when they occur. Required by t…
Cash basis accounting
Records only cash transactions such as cash receipts and cash…
11 terms
Financial Accounting Chapter 3
Accrual Basis Accounting
Cash Basis Accounting
Expense Recognition Principle (Matchin…
Expenses
Recording revenues when earned and expenses when incurred, re…
Recording revenues when dash is received and expenses when ca…
Expenses are recorded when incurred in earning revenue.
Decreases in assets or increases in liabilities from ongoing…
Accrual Basis Accounting
Recording revenues when earned and expenses when incurred, re…
Cash Basis Accounting
Recording revenues when dash is received and expenses when ca…
40 terms
Financial 6 - Pension and Income Tax Accounting
Accumulated Benefit Obligation:
Projected Benefit Obligation:
Service Cost:
Interest Cost:
Actuarial present value of benefits attributed by a formula b…
Actuarial present value of ALL benefits attributed by the pla…
Present value of all pension benefits earned in the current y…
The increase in PBO due to the passage of time.... Interest Cost…
Accumulated Benefit Obligation:
Actuarial present value of benefits attributed by a formula b…
Projected Benefit Obligation:
Actuarial present value of ALL benefits attributed by the pla…
8 terms
Accounting for Uncertainty in Income Tax Positions (financial)
FIN 48 (ASC 740)
2 Step process to evaluate tax position
Step One: recognition
Step Two: measurement
Established in 2006, provide a uniform approach to recording…
1st step: recognition [company must determine whether it is m…
Determine "more likely or not". Then record position on finan…
This measurement process requires the company to make a cumul…
FIN 48 (ASC 740)
Established in 2006, provide a uniform approach to recording…
2 Step process to evaluate tax position
1st step: recognition [company must determine whether it is m…
25 terms
Financial acct. ch. 3 (accrual acct. and income)
expense recognition principle
liquidation
time-period concept
revenue principle
identifies all the expenses incurred during the acct. period
selling assets, returning cash to owners, and going out of bu…
ensures that acct. info is reported at regular intervals and…
when to record revenue and what amount of revenue to record
expense recognition principle
identifies all the expenses incurred during the acct. period
liquidation
selling assets, returning cash to owners, and going out of bu…
Intermediate Exam 1: Structure of Financial Accounting, Review of Accounting, The Balance Sheet and Financial Disclosures, The Income Statement and Comprehensive Income
Accounting
GAAP
FASB
Objective of accounting
is the language of business
- Generally Accepted Accounting Principles... - they come from t…
Financial Accounting Standards Board
- to provide financial information that is useful to capital…
Accounting
is the language of business
GAAP
- Generally Accepted Accounting Principles... - they come from t…
119 terms
Financial Accounting Test 3 Chapters 3,5,6 (Closing Entries, Merchandising Entities, Income Statement, Financial Statement Analysis, Ratios)
account format
accrual
accrual accounting
accrued expense
a balance sheet format that lists assets on the left and liab…
an expense or a revenue that occurs before the business pays…
accounting that records the impact of a business event as it…
an expense incurred but not yet paid in cash
account format
a balance sheet format that lists assets on the left and liab…
accrual
an expense or a revenue that occurs before the business pays…
10 terms
Unit 3 Financial Accounting
Accrual Basis Accounting
Cash Basis Accounting
Expense Matching Principle
Expenses
Records revenues when earned and expenses when incurred, rega…
Records revenues when cash is received and expenses when cash…
Requires that expenses be recorded when incurred in earning r…
Decreases in assets or increases in liabilities from ongoing…
Accrual Basis Accounting
Records revenues when earned and expenses when incurred, rega…
Cash Basis Accounting
Records revenues when cash is received and expenses when cash…
Income Tax Accounting - Chpt. #3
arm's-length transaction
assignment of income doctrine
business purpose doctrine
constructive receipt doctrine
transactions among unrelated taxpayers, where each transactin…
the judicial doctrine holding that earned income is taxed to…
the judicial doctrine that allows the IRS to challenge and di…
the judicial doctrine that provides that a taxpayer must reco…
arm's-length transaction
transactions among unrelated taxpayers, where each transactin…
assignment of income doctrine
the judicial doctrine holding that earned income is taxed to…
96 terms
Financial Accounting Test 3
Internal control
Sarbanes-Oxley Act (SOX)
Public Company
Internal control report
The organizational plan and all the related measures adopted…
Requires public companies to review internal controls and tak…
A company that sells its stock to the general public.
A report by management describing its responsibility for and…
Internal control
The organizational plan and all the related measures adopted…
Sarbanes-Oxley Act (SOX)
Requires public companies to review internal controls and tak…
19 terms
Financial Accounting - Chapter 3
accounting period concept
accrual basis of accounting
accrued expenses
accrued revenues
The accounting concept that assumes that the economic life of…
Under this basis of accounting, revenues and expenses are rep…
Expenses that have been incurred but not recorded in the acco…
Revenues that have been earned but not recorded in the accoun…
accounting period concept
The accounting concept that assumes that the economic life of…
accrual basis of accounting
Under this basis of accounting, revenues and expenses are rep…
73 terms
Financial Accounting Chapter 3
Accrual-basis accounting
the revenue recognition principle
the matching principle
Accruals
Recording revenues when earned (the revenue recognition princ…
requires that revenue be recognize in the accounting period w…
match expenses against the revenues earned in the SAME period…
occur when the cash flow occurs after either the expense is i…
Accrual-basis accounting
Recording revenues when earned (the revenue recognition princ…
the revenue recognition principle
requires that revenue be recognize in the accounting period w…
Financial Accounting Chapter 3
Operating Activities
Time Period Assumption
Going Concern Assumption
Revenue Recognition Principle
Include buying goods & services from suppliers, employees and…
dividing the company's long life into shorter chunks of time…
we assume the company will continue into the indefinite future.
revenue is recognized when earned.
Operating Activities
Include buying goods & services from suppliers, employees and…
Time Period Assumption
dividing the company's long life into shorter chunks of time…
9 terms
Financial Accounting: Income Statement Account Definitions (Exam 1)
revenues, sales, sales revenue
cost of sales, cost of goods sold (exp…
salaries (expense)
insurance (expense)
The amount earned by a company for providing a service or sel…
This is the cost of the product being sold (either manufactur…
Amount paid to employees
Amount for insurance
revenues, sales, sales revenue
The amount earned by a company for providing a service or sel…
cost of sales, cost of goods sold (exp…
This is the cost of the product being sold (either manufactur…
Financial Accounting Chapter 3
Accounting can be based on either the…
_____ _____ records the impact of a bu…
_____-_____ _____ records only cash tr…
GAAP (Generally Accepted Accounting Pr…
Accrual; cash
Accrual accounting
Cash-basis accounting
Accrual
Accounting can be based on either the…
Accrual; cash
_____ _____ records the impact of a bu…
Accrual accounting
Financial Accounting - Chapter 3
Analyzing transactions
Accounting information systems rely on…
Transactions
Double-entry system
the process of identifying the specific effects of economic e…
the accounting cycle.
economic events that must be captured in the Accounting Infor…
Each transaction must affect two or more accounts to keep the…
Analyzing transactions
the process of identifying the specific effects of economic e…
Accounting information systems rely on…
the accounting cycle.
CAF Financial Accounting Topic 7 Accounting for Income Tax
Accounting Profit
Taxable/Income profit
Some Differences Between Accounting an…
Some Differences Between Accounting an…
= Revenue earned less expenses incurred... - based on accrual ac…
= assessable (taxable) income take allowable deductions (expe…
Generally accepted Accounting Rule: An Expense when accrued…
Generally accepted accounting rule: Initially an asset. Expen…
Accounting Profit
= Revenue earned less expenses incurred... - based on accrual ac…
Taxable/Income profit
= assessable (taxable) income take allowable deductions (expe…
18 terms
Financial Accounting Chapter 3
Accounting Period Concept
Accrual Basis of Accounting
Revenue Recognition Concept
Matching Concept
assumes that the economic life of a business can be divided i…
revenues and expenses are reported in the income statement in…
supports reporting revenues when the service is provided to c…
expenses are matched with the revenue generated during a peri…
Accounting Period Concept
assumes that the economic life of a business can be divided i…
Accrual Basis of Accounting
revenues and expenses are reported in the income statement in…
73 terms
Financial Accounting Chapter 3
Accrual-basis accounting
the revenue recognition principle
the matching principle
Accruals
Recording revenues when earned (the revenue recognition princ…
requires that revenue be recognize in the accounting period w…
match expenses against the revenues earned in the SAME period…
occur when the cash flow occurs after either the expense is i…
Accrual-basis accounting
Recording revenues when earned (the revenue recognition princ…
the revenue recognition principle
requires that revenue be recognize in the accounting period w…
29 terms
Financial Accounting Chapter 3
Accrual Basis Accounting
Cash Basis Accounting
Expense Recognition Principle (Matchin…
Expenses
Recording revenues when earned and expenses when incurred, re…
Recording revenues when cash is received and expenses when ca…
Expenses are recorded when incurred in earning revenue. The p…
Decreases in assets or increases in liabilities from ongoing…
Accrual Basis Accounting
Recording revenues when earned and expenses when incurred, re…
Cash Basis Accounting
Recording revenues when cash is received and expenses when ca…
42 terms
Ch 3: Accrual Accounting & Income
Accrual accounting
Accrual accounting records the transac…
GAAP - generally accepted accounting p…
In accrual accounting businesses recor…
Records the impact of a business transaction as it occurs
even if the business receives or pays no cash.
Accrual accounting
revenues as they are earned and expenses as they are incurred…
Accrual accounting
Records the impact of a business transaction as it occurs
Accrual accounting records the transac…
even if the business receives or pays no cash.
Financial Chapter 3 (Income Statement)
retained earnings equation
net income equation
purpose of income statement:
what dividends are not:
retained earnings (beginning) + net income - dividends... = reta…
net income = ... retained earnings (ending) - retained earnings…
to display the line items for components of net income
expenses
retained earnings equation
retained earnings (beginning) + net income - dividends... = reta…
net income equation
net income = ... retained earnings (ending) - retained earnings…
32 terms
Chapter 3: Accrual Accounting and Income
Accrual
Accrual accounting
accrued expense
Accrued revenue
Records business transactions... - when they occur ... - when the b…
Accounting that records the impact of a business event as it…
An expense that has been incurred but not yet paid in cash
A revenue that has been earned but not yet received in cash
Accrual
Records business transactions... - when they occur ... - when the b…
Accrual accounting
Accounting that records the impact of a business event as it…
Intro to Financial Accounting - Week 9 - Income
Define income (under the framework):
What is included in the income standard?
What are the characteristics of a gain?
What are the issues associated with in…
"Increases in economic benefits during the accounting period…
Revenue para 74 - arises from ordinary activities... Gains para…
- No definition in framework... - May or may not arise from oper…
- Framework adopts A/L approach to measurement of elemtents... -…
Define income (under the framework):
"Increases in economic benefits during the accounting period…
What is included in the income standard?
Revenue para 74 - arises from ordinary activities... Gains para…
14 terms
Income Tax Accounting Chapter 3
annuity
arm's-length transaction
deduction
discount rate
a cash flow consisting of a constant dollar amount available…
A transaction in which the buyers and sellers of a product ac…
reduces taxable income and causes a corresponding reduction i…
after tax rate of interest on invested funds for the deferral…
annuity
a cash flow consisting of a constant dollar amount available…
arm's-length transaction
A transaction in which the buyers and sellers of a product ac…
25 terms
Chap 3 Financial Accounting
Accrual-basis Accounting
Accrued Expense
Accrued Revenue
Prepaid Expenses
Record revenues when earned and expenses with related revenues
When a company has incurred an expense but hasn't yet paid ca…
When a company has earned revenue but hasn't yet received cas…
Paid cash (or had an obligation to pay cash) for the purchase…
Accrual-basis Accounting
Record revenues when earned and expenses with related revenues
Accrued Expense
When a company has incurred an expense but hasn't yet paid ca…
23 terms
Financial Accounting - Chapter 3
accounting cycle
fiscal year
calendar year
chart of accounts
the sequence of activities to accumulate and report financial…
one year accounting period
when fiscal year ends on December 31
lists the titles and numbers of all accounts found in the gen…
accounting cycle
the sequence of activities to accumulate and report financial…
fiscal year
one year accounting period
Financial Accounting Chapter 3
Accrual-basis accounting
the revenue recognition principle
the matching principle
Accruals
Recording revenues when earned (the revenue recognition princ…
requires that revenue be recognize in the accounting period w…
match expenses against the revenues earned in the SAME period…
occur when the cash flow occurs after either the expense is i…
Accrual-basis accounting
Recording revenues when earned (the revenue recognition princ…
the revenue recognition principle
requires that revenue be recognize in the accounting period w…
Financial Accounting Ch. 3
Operating (Cash-to-Cash) Cycle
Time Period Assumption
Revenues
Expenses
The time it takes for a company to pay cash to suppliers, sel…
Indicates that the long life of a company can be reported in…
Increases in Assets or settlements of liabilities from ongoin…
Outflows or the using up of assets or increases in liabilitie…
Operating (Cash-to-Cash) Cycle
The time it takes for a company to pay cash to suppliers, sel…
Time Period Assumption
Indicates that the long life of a company can be reported in…
Chapter 3 (Accrual Accounting and Income)
Account Format
Accrual
Accrual Accounting
Accrued Expense
A balance sheet format that lists assets on the left and liab…
An expense or a revenue that occurs before the business pays…
Records the impact of a business event as it occurs, regardle…
Expense incurred but not yet paid in cash
Account Format
A balance sheet format that lists assets on the left and liab…
Accrual
An expense or a revenue that occurs before the business pays…
29 terms
Financial Accounting Chap. 3
accrual accounting
cash-basis accounting
time-period concept
revenue principle
records the impact of a business transaction as it occurs
records only cash transactions
ensures that accounting information is reported at regular in…
when to record (recognize) revenue ... what amount of revenue to…
accrual accounting
records the impact of a business transaction as it occurs
cash-basis accounting
records only cash transactions
81 terms
Financial Accounting Unit 3
The return on assets ratio can be comp…
A characteristic of capital expenditur…
Capital expenditures are expenditures…
The cost of a patent should be amortiz…
True
False
True
True
The return on assets ratio can be comp…
True
A characteristic of capital expenditur…
False
46 terms
Intermediate Financial Accounting- Wiley, Chpt4: Income Statement & Related Info
How is the Income Statement Useful?
What are the limitations of the Income…
How might the quality of earnings be r…
Revenues
-to evaluate past performance... -to predict future performance…
-Companies omit items that cannot be measured reliably... -Incom…
-if earnings management results in information that is less u…
Inflows or other enhancements of assets or settlements of its…
How is the Income Statement Useful?
-to evaluate past performance... -to predict future performance…
What are the limitations of the Income…
-Companies omit items that cannot be measured reliably... -Incom…
32 terms
Financial Accounting 3
operations
operating cycle
time period assumption
recognition, measurement
to stay in business, excess cash must be generated from ___,…
the time it takes for a company to pay cash to suppliers, sel…
___ indicates that the long life of a company can be reported…
___ and ___ issues exist in the recording of operating activi…
operations
to stay in business, excess cash must be generated from ___,…
operating cycle
the time it takes for a company to pay cash to suppliers, sel…
Financial Accounting 3: Accrual Accounting
accrual accounting
cash basis accounting
time period concept
liquidation
method that records the influence of a business transaction a…
records only the cash transactions.
makes sure that accounting information is reported regularly…
going out of business
accrual accounting
method that records the influence of a business transaction a…
cash basis accounting
records only the cash transactions.
35 terms
Chapter 3: Accrual Accounting & Income
Account Format
Accrual Accounting
Accrued Expense
Accrued Revenue
A balance sheet format that lists assets on the left and liab…
An expense or a revenue that occurs before the business pays…
An expense incurred but not yet paid in cash.
A revenue that has been earned but not yet received in cash.
Account Format
A balance sheet format that lists assets on the left and liab…
Accrual Accounting
An expense or a revenue that occurs before the business pays…
34 terms
Chapter 3: Accrual Accounting & Income
Account Format
Accrual Accounting
Accrued Expense
Accrued Revenue
A balance sheet format that lists assets on the left and liab…
An expense or a revenue that occurs before the business pays…
An expense incurred but not yet paid in cash.
A revenue that has been earned but not yet received in cash.
Account Format
A balance sheet format that lists assets on the left and liab…
Accrual Accounting
An expense or a revenue that occurs before the business pays…
10 terms
Accounting - Chapter 3 (The Income Statement
Income Statement
Profit
Revenue
Expenses
Presents revenue, expenses and net income/loss for a specific…
Increase in owner's equity that results from the successful o…
Amounts earned from the sale of goods or services during the…
Costs of items or services used up in the routine operation o…
Income Statement
Presents revenue, expenses and net income/loss for a specific…
Profit
Increase in owner's equity that results from the successful o…
56 terms
Financial accounting CH 3
When preparing financial statements, t…
What accounting concept requires that…
Under the ___ basis of accounting, rev…
The accounting concept supporting repo…
time periods
accounting period concept
accrual
matching concept
When preparing financial statements, t…
time periods
What accounting concept requires that…
accounting period concept
Financial Accounting ch. 3
Accrual accounting
Cash-basis accounting
GAAP
time-period concept
records impact of business transaction as it occurs. records…
records only cash transactions- cash receipts (treated as rev…
Generally Accepted Accounting Principles
ensures that accounting information is reported at regular in…
Accrual accounting
records impact of business transaction as it occurs. records…
Cash-basis accounting
records only cash transactions- cash receipts (treated as rev…
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