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Study sets matching "accounting equations"

30 terms
Accounting Equations
Assets Liabilites Equity Equation
Total Equity Equation
Retained Earning Equation
Net Income Equation
Assets = Liabilities + Equity
Common Stock + Retained Earning
Beginning Retained Earning + Net Income -Dividends =
Revenues - Expenses
Assets Liabilites Equity Equation
Assets = Liabilities + Equity
Total Equity Equation
Common Stock + Retained Earning
30 terms
Accounting Equations
Assets Liabilites Equity Equation
Total Equity Equation
Retained Earning Equation
Net Income Equation
Assets = Liabilities + Equity
Common Stock + Retained Earning
Beginning Retained Earning + Net Income -Dividends =
Revenues - Expenses
Assets Liabilites Equity Equation
Assets = Liabilities + Equity
Total Equity Equation
Common Stock + Retained Earning
11 terms
The Accounting Equation
Accounting
Accounting System
Accounting Records
Service business
Planning, recording, analyzing, and interpreting financial in…
A planned process for providing financial information that wi…
Organized summaries of a business's financial activities
A business that performs an activity for a fee
Accounting
Planning, recording, analyzing, and interpreting financial in…
Accounting System
A planned process for providing financial information that wi…
23 terms
Accounting Equations
Assets Liabilites Equity Equation
Total Equity Equation
Retained Earning Equation
Net Income Equation
Assets = Liabilities + Equity
Common Stock + Retained Earning
Beginning Retained Earning + Net Income -Dividends =
Revenues - Expenses
Assets Liabilites Equity Equation
Assets = Liabilities + Equity
Total Equity Equation
Common Stock + Retained Earning
23 terms
Accounting Equations
Gross Profit
Net Income
Accounts Receivable Turnover Ratio
Inventory Turnover Ratio
Net Sales - COGS
Gross Profit - operating expenses - taxes
Net sales / average accounts receivable
COGS / Average inventory ... or ... Sales / Average inventory
Gross Profit
Net Sales - COGS
Net Income
Gross Profit - operating expenses - taxes
37 terms
Accounting Equations
COGAS (cost of goods available for sale)
Average Unit Cost
Net Sales
Ending inventory
(Beginning inventory) + (net purchases) + (shipping)
(total cost of all goods added up) / (Total # of units for sa…
(Gross sales) - (Sales returns and allowances)
(Beginning inventory) + (Net purchases) + (shipping) - (COGS)
COGAS (cost of goods available for sale)
(Beginning inventory) + (net purchases) + (shipping)
Average Unit Cost
(total cost of all goods added up) / (Total # of units for sa…
9 terms
Accounting equations
Contribution Margin
Contribution Margin per Unit
Contribution Margin Ratio
Operating Leverage
Sales Revenue - Total Variable Cost
Price - Variable cost per unit
Contribution Margin / Sales Revenue
CM/Net Income
Contribution Margin
Sales Revenue - Total Variable Cost
Contribution Margin per Unit
Price - Variable cost per unit
21 terms
accounting equations
allocation of net income based on stat…
allocation of net income based on capi…
Chapter 13--Corporations
preferred dividends =
net income x stated ratio
net income x (capital balance/total capital)
...
outstanding shares x par value x preferred dividend rate
allocation of net income based on stat…
net income x stated ratio
allocation of net income based on capi…
net income x (capital balance/total capital)
9 terms
accounting equations
variable cost per unit
fixed xosts
express variable and fixed cost in Y =…
calculate break even units
change in costs / change in days
high cost - (VCU x high days)
fixed costs + VC(high days)
difference in costs x fixed costs
variable cost per unit
change in costs / change in days
fixed xosts
high cost - (VCU x high days)
8 terms
Accounting Equations
net realizable value of accounts recei…
Earnings Per Share (EPS)
Dividend Yield
Price - Earnings Ratio
Accounts Receivable - Allowance for Doubtful Accounts
(net income - preferred stock dividends) / outstanding common…
Dividends per share of common stock / market price of common…
Market price of common stock / EPS of common stock
net realizable value of accounts recei…
Accounts Receivable - Allowance for Doubtful Accounts
Earnings Per Share (EPS)
(net income - preferred stock dividends) / outstanding common…
14 terms
Accounting Equations
Inventory Turnover Ratio
Gross Profit Percentage
Current Ratio
LIFO Tax Saving for one year
COGS/Avg. Inventory
Gross Profit/ Total Sales Revenue
Current Assets/ Current Liabilities
(Increase in LIFO reserve)(Tax Rate)
Inventory Turnover Ratio
COGS/Avg. Inventory
Gross Profit Percentage
Gross Profit/ Total Sales Revenue
42 terms
Accounting Equations
Percentage of Sales Approach
percentage of receivables approach
recievables turnover ratio
days in receivables ratio
bad debt expense= sales x percentage
recievables x percentage+/- allowance for bad debts
credit sales/ average receivables
365/ recievables turnover ratio
Percentage of Sales Approach
bad debt expense= sales x percentage
percentage of receivables approach
recievables x percentage+/- allowance for bad debts
19 terms
Accounting Equations
Unit Contribution Margin
contribution margin ratio
break even points in units
break even points in dollars
Unit selling price-unit variable costs
unit contribution margin/unit selling price
fixed costs/unit contribution margin
fixed costs/contribution margin ratio
Unit Contribution Margin
Unit selling price-unit variable costs
contribution margin ratio
unit contribution margin/unit selling price
13 terms
Accounting Equations
Balance Sheet
Income Statement
Statement of Retained Earnings
Statement of Cash Flows
Assets = Liabilities + Stockholders' Equity
Revenues - Expenses ... = Net Income
Retained Earnings (beginning) + Net Income - Dividends... = Ret…
+/- Cash Flows from Operating Activities... +/- Cash Flows from…
Balance Sheet
Assets = Liabilities + Stockholders' Equity
Income Statement
Revenues - Expenses ... = Net Income
19 terms
Accounting Equations
Gross Profit
Net Income... (Income from Operations)
Cost of Goods Available for Sale
Cost of Goods Sold (Periodic Inventory)
Sales Revenue-Cost of Goods Sold
Gross Profit-Operating Expenses
Beginning Inventory+Cost of Goods Purchased
(Beginning Inventory+Purchases)-Ending Inventory
Gross Profit
Sales Revenue-Cost of Goods Sold
Net Income... (Income from Operations)
Gross Profit-Operating Expenses
8 terms
Accounting Equations
Assets
Current Ratio
Working Capital
Net Income
=Liabilities+Stockholders Equity
= current assets/current liabilities
=current assets-current liabilites
=Total Revenue-Total Expenses
Assets
=Liabilities+Stockholders Equity
Current Ratio
= current assets/current liabilities
9 terms
Accounting Equations
gross profit
operating expenses
net income
straight line depreciation
sales- cost of goods sold
day to day expenses: rent, advertising, insurance, salaries.…
all revenues- all expenses... also means: gross profit- operatin…
[original (historic) cost - salvage (residual) value]/useful…
gross profit
sales- cost of goods sold
operating expenses
day to day expenses: rent, advertising, insurance, salaries.…
20 terms
Accounting equations
Period cost
Prime cost
Conversion cost
Fixed cost element
Selling expenses + Admin expenses
Direct material cost + Direct labor cost
Direct labor cost + Manufacturing overhead cost
Total cost - Variable cost element
Period cost
Selling expenses + Admin expenses
Prime cost
Direct material cost + Direct labor cost
10 terms
Accounting equations
income statement
statement of stockholders equity
balance sheet
cash flow
revenues - expenses = net income
beginning equity + owner contributions + net income - dividen…
Liabilities + Equity = Assets
cash inflow - cash outflow = net cash flow
income statement
revenues - expenses = net income
statement of stockholders equity
beginning equity + owner contributions + net income - dividen…
25 terms
Accounting Equations
Assets
Net Income
Assets
Equity
Liabilities + Equity
Revenue - Expenses
Liabilities + (Capital Stock + Retained Earnings)
Capital Stock + Retained Earnings
Assets
Liabilities + Equity
Net Income
Revenue - Expenses
23 terms
Accounting equations
Debt Ratio
Current Ratio
Net Sales Revenue
Gross Profit Percentage
Total Liabilities / Total Assets
Total Current Assets / Total Current Liabilities
Sales Revenue - Sales Returns and Allowances - Sales Discounts
Gross Profit / Net Sales Revenue
Debt Ratio
Total Liabilities / Total Assets
Current Ratio
Total Current Assets / Total Current Liabilities
11 terms
Accounting Equations
ROI
ROA
Debt Ratio
Assets Turnover
Net Profit / Average Owners Equity ... x 100
Net Profit / Average Total Assets... x 100
Total Liabilities / Total Assets... x 100
Sales / Average Total Assets
ROI
Net Profit / Average Owners Equity ... x 100
ROA
Net Profit / Average Total Assets... x 100
16 terms
Accounting Equations
Asset Turnover
Cash Return on Assets
Cash Flow to Sales
Return on Equity
Sales/ Average Total Assets
Operating/ Average Total Assets
Operating Cash Flows/ Net Sales
Net Income/ Average Stockholders Equity
Asset Turnover
Sales/ Average Total Assets
Cash Return on Assets
Operating/ Average Total Assets
16 terms
Accounting Equations
Assets=
Net Income=
Retained Earnings=
Current Ratio=
Liabilities + Owner's equity
Revenues - Expenses
Revenues + Gains - Expenses - Losses
Current Assets / Current Liabilities
Assets=
Liabilities + Owner's equity
Net Income=
Revenues - Expenses
11 terms
Accounting equations
Gross profit margin
Gross profit mark-up
Net profit margin
Overheads in relation to revenue
Gross profit x100... Revenue (sales)
Gross profit x100... Cost of sales
Profit for the year before tax x100... Revenue
Overheads (expenses) x100... Revenue ( sales )
Gross profit margin
Gross profit x100... Revenue (sales)
Gross profit mark-up
Gross profit x100... Cost of sales
32 terms
Accounting Equations
Cost of goods sold
Gross profit
Net income
Net sales
(Beg. Inventory)+purchases- (end inventory)
Sales revenue -COGS
Gross profit- operating expenses
Sales- sales returns- sales discounts
Cost of goods sold
(Beg. Inventory)+purchases- (end inventory)
Gross profit
Sales revenue -COGS
17 terms
Accounting Equations
Accounting Equation
Current Ratio
Net Profit Margin
Debt-to-Assets Ratio
Assets = Liabilities + Stockholder's Equity
Current Assets/ Current Liabilities
Net Income/ Total Revenue
Total Liabilities/ Total Assets
Accounting Equation
Assets = Liabilities + Stockholder's Equity
Current Ratio
Current Assets/ Current Liabilities
15 terms
Accounting Equations
ROI (return on investment)
sales margin
capital turnover
RI
operating income/ total assets
operating income/ sales
sales/ total assets
operating income - (target rate of return X total assets)
ROI (return on investment)
operating income/ total assets
sales margin
operating income/ sales
20 terms
Accounting Equations
Accounting Equation
Return on Assets (ROA)
Debt Ratio
Straight-Line Depreciation
Assets = Liabilities + Equity
Net Income / Average Total Assets
Total Liabilities / Total Assets
(Cost-Residual Value) / Useful Life
Accounting Equation
Assets = Liabilities + Equity
Return on Assets (ROA)
Net Income / Average Total Assets
10 terms
The Accounting Equation
Assets
Liabilities
Owners Equity
The Balance Sheet...
A resource controlled by the entity, as a result of past even…
A present obligation of the entity, as a result of past event…
The residual interest in the assets of the entity after the l…
...shows the entity's financial position by showing assets, l…
Assets
A resource controlled by the entity, as a result of past even…
Liabilities
A present obligation of the entity, as a result of past event…
16 terms
Accounting Equations
Current Ratio
Dividend Payout Ratio
Return on Sales
Debt to Equity
Current assets/Current liabilities
Dividends/Net income
Net income/Sales Revenue
Interest Bearing Debt/Common SE
Current Ratio
Current assets/Current liabilities
Dividend Payout Ratio
Dividends/Net income
10 terms
Accounting Equations
Cost of Goods Available
Cost of Goods Sold
Operating Income
Gross Profit
Beg Inv + purchases
Cost of Goods Available - Ending Inventory
Gross Profit - operating expenses - depreciation
sales revenue - cost of goods sold
Cost of Goods Available
Beg Inv + purchases
Cost of Goods Sold
Cost of Goods Available - Ending Inventory
22 terms
Accounting Equations
Cash Paid to Suppliers
COGAS
Cogs
Total Manufacturing Cost
COGS + Change in inventory - Change in AP
Beg. Inventory + Purchases + freight-in + import duties
COGAS - End Inventory
DM + DL + MOH
Cash Paid to Suppliers
COGS + Change in inventory - Change in AP
COGAS
Beg. Inventory + Purchases + freight-in + import duties
27 terms
Accounting Equations
Net Profit Margin
Net Profit Margin Meaning
Gross Profit %
Gross Profit % Meaning
(Net Income/Revenue)x100
% of revenue into net income after expenses, higher is better.
(Net Sales-CGS)/Net Sales
Profit per dollar of sales after deducting cost of goods sold…
Net Profit Margin
(Net Income/Revenue)x100
Net Profit Margin Meaning
% of revenue into net income after expenses, higher is better.
16 terms
Accounting Equations
Gross Profit
Operating Margin
Profit Margin
Current Ratio
x cents of every dollar in sales are left to cover operating…
earned a operating profit of x cents on every dollar of sales
earned a profit of x cents on every dollar or sale
x dollars of current assets on balance sheet that might be us…
Gross Profit
x cents of every dollar in sales are left to cover operating…
Operating Margin
earned a operating profit of x cents on every dollar of sales
11 terms
Accounting Equations
Contribution Margin
Breakeven
Market capitalisation
Fixed costs
Selling price- variable costs
Fixed costs/ contribution margin
No. Of shares X value of each share
total costs- variable costs (X)
Contribution Margin
Selling price- variable costs
Breakeven
Fixed costs/ contribution margin
31 terms
Accounting equations
Current ratio
Debt ratio
Quick acid test ratio
Day sales in receivables
Total current assets / Total current liabilities
Total liabilities / Total assets
(cash and cash equivalents+ short term investments+ net curre…
Average net receivables/ average daily sales
Current ratio
Total current assets / Total current liabilities
Debt ratio
Total liabilities / Total assets
9 terms
Accounting Equations
Margin
Turnover
Return on Investment (ROI)
Material Price Variance
NOI/Sales
Sales/Avg. Operating Assets
NOI/Avg. Operating Assets
AQ(AP-SP)
Margin
NOI/Sales
Turnover
Sales/Avg. Operating Assets
9 terms
Accounting equations
CM Ratio to total sales
CM Ratio per unit data
break even equation
break even equation shortcut
contribution margin/total sales
unit contribution margin/unit selling price
Qselling price/unit=Qvariable expense/unit+fixed expenses+pro…
fixed expenses/cm/u
CM Ratio to total sales
contribution margin/total sales
CM Ratio per unit data
unit contribution margin/unit selling price
17 terms
accounting equations
inventory turnover
Average inventory
Days to sell
Ending inventory
COGS... _______________ ... avg inventory
beginning inventory + ending inventory... ______________________…
365... ___________________... inventory turnover
COGAFS - COGS
inventory turnover
COGS... _______________ ... avg inventory
Average inventory
beginning inventory + ending inventory... ______________________…
13 terms
Accounting Equations
current assets - current liabilities
current assets/current liabilities
cost of goods sold/average inventory
365/inventory turnover
Working Capital -indicates short-term liquidity
Current Ratio -indicates short-term liquidity
Inventory Turnover Ratio -shows how many sales a company had…
Days sales in inventory -Shows average sales per day
current assets - current liabilities
Working Capital -indicates short-term liquidity
current assets/current liabilities
Current Ratio -indicates short-term liquidity
23 terms
Accounting Equations
Break-Even Point
Contribution per unit
Contribution margin ratio
Margin of safety (units)
x + fixed costs/selling price per unit - variable cost per unit
Sales revenue per unit - variable cost per unit
Contribution/sales revenue * 100
Actual sales units - break-even sales unit
Break-Even Point
x + fixed costs/selling price per unit - variable cost per unit
Contribution per unit
Sales revenue per unit - variable cost per unit
9 terms
Accounting equations
Gross profit margin
Gross margin
Cost of goods sold
Gross profit ratio
Gross profit / net sales
Revenue- cogs
Cogafs-ending inventory
(Net sales-cogs) / net sales
Gross profit margin
Gross profit / net sales
Gross margin
Revenue- cogs
11 terms
Accounting Equations
Retained Earnings
Accounting Equations
Bal Sheet Accumulated Dep.
Allowance for Doubtful Accounts
Beginning R/E + N/I - This yrs. Dividends = End R/E
A= L + Stock + R/E
Acc Dep. = Sum Dep. Expense of assets we still own
Allowance for Doubtful Accounts = Sum Bad Debit Expense - Sum…
Retained Earnings
Beginning R/E + N/I - This yrs. Dividends = End R/E
Accounting Equations
A= L + Stock + R/E
Accounting equations
return on assets
profit margin
asset turnover
current ratio
net income/avg total assets
net income/net sales
net sales/avg total assets
current assets/current liabilities
return on assets
net income/avg total assets
profit margin
net income/net sales
11 terms
Accounting Equations
COGS
Acid-Test Ratio or quick ratio
Current Ratio
Gross Margin Ratio
Net Sales - Gross Profit
Quick Assets/Current Liabilities
Current Assets/Current Liabilities
Gross Profit/Net Sales
COGS
Net Sales - Gross Profit
Acid-Test Ratio or quick ratio
Quick Assets/Current Liabilities
21 terms
accounting equations
net income
why is net income an important number
ending balance of retained earnings
retained earnings
revenues - expenses
it drives stock prices ... much of GAAP is concerned with making…
beginning retained earning + net income - dividends
revenues - expenses (net income) - dividends
net income
revenues - expenses
why is net income an important number
it drives stock prices ... much of GAAP is concerned with making…
17 terms
Accounting Equations
Receivables Turnover Ratio
Average Collection Period
Gross Profit
Average Weighted Cost
Net Credit Sales/Average Accounts Receivable
365 days/Receivables Turnover Ratio
Net Sales-COGS
Total cost/Total Units
Receivables Turnover Ratio
Net Credit Sales/Average Accounts Receivable
Average Collection Period
365 days/Receivables Turnover Ratio
Accounting Equations
cost of goods sold/average inventory
365/inventory turnover ratio
beginning inventory(BI)+purchases(P)=
goods available for sale-cost of goods…
inventory turnover ratio
days to sell
Cost of goods available for sale
ending inventory
cost of goods sold/average inventory
inventory turnover ratio
365/inventory turnover ratio
days to sell
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