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Study sets matching "3 financial accounting income"

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Study sets matching "3 financial accounting income"

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.
35 terms
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.
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 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…
82 terms
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…
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…
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…
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…
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…
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…
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…
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…
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…
27 terms
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…
100 terms
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…
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…
40 terms
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…
11 terms
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…
12 terms
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…
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…
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…
10 terms
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…
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…
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…
94 terms
Financial Accounting Exam 3
Depreciation
Why do we depreciate items?
Items that are depreciated have a ____…
Amoritization
amortization of a fixed asset
Because long-lived assets are used in the operations of a bus…
definite
Systematic allocation of deferred charge over its life.
Depreciation
amortization of a fixed asset
Why do we depreciate items?
Because long-lived assets are used in the operations of a bus…
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…
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
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…
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
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…
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.
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…
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…
11 terms
Financial Accounting Ch. 3
Accrual Basis Accounting
Cash Basis Accounting
Expenses
Expense Recognition Principle ("Matchi…
Recording revenues when earned and expenses when incurred, re…
Recording revenues when cash is received and expense when cas…
Decreases in assets or increases in liabilities from ongoing…
Expenses are recorded when incurred in earning revenue
Accrual Basis Accounting
Recording revenues when earned and expenses when incurred, re…
Cash Basis Accounting
Recording revenues when cash is received and expense when cas…
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…
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…
26 terms
Ch. 3 Accrual Accounting and Income
Accrual accounting definition
Cash Basis accounting definition
Adjusting entries: Not about accountin…
Three Basic Categories for adjusting e…
Records impact of transactions when they occur; Required by (…
Records only cash transactions ,Cash receipts, Cash payments,…
Journal entries made to ensure that revenues and expenses are…
Accruals, deferrals, depreciation
Accrual accounting definition
Records impact of transactions when they occur; Required by (…
Cash Basis accounting definition
Records only cash transactions ,Cash receipts, Cash payments,…
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…
40 terms
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.
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…
59 terms
Financial Accounting // exam #3
Tangible Assets
Intangible Assets
Acquisition Cost
Capitalized Interest
Property, plant and equipment.... (land is the only asset NOT de…
Goodwill, Trademarks, Copyrights, Patents, Technology, Franch…
Net cash paid for an asset.... Includes all costs to get the ass…
All costs associated with building the project.... Interest is c…
Tangible Assets
Property, plant and equipment.... (land is the only asset NOT de…
Intangible Assets
Goodwill, Trademarks, Copyrights, Patents, Technology, Franch…
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…
21 terms
Ch. 3 Accrual Accounting and Income
Accrual Accounting
Cash-basis Accounting
GAAP Requires Accrual Accounting
Balance-Sheet Defect
- records impact of a transaction as it occurs... -record even i…
-records ONLY cash transactions ... -cash receipts (revenue) and…
-Record revenue as the revenus are earned and expenses as the…
When using cash-basis... - fail to record a sale on account > ba…
Accrual Accounting
- records impact of a transaction as it occurs... -record even i…
Cash-basis Accounting
-records ONLY cash transactions ... -cash receipts (revenue) and…
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…
14 terms
Financial Accounting Chapter 3
Operating Activities
Revenues
Expenses
Net Income
the day-to-day functions involved in running a business and a…
the amounts a business charges its customers when it provides…
Costs of operating the business, incurred to generate revenue…
The excess of revenues over expenses and indicates the amount…
Operating Activities
the day-to-day functions involved in running a business and a…
Revenues
the amounts a business charges its customers when it provides…
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