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25 Cards in this Set

  • Front
  • Back
single owner
owner is personally liable for business
typically a small business
proprietorship
multiple owners
owners are personally liable for business
typically a small to medium sized business
partnership
multiple owners (stockholders)
owners are not personally liable for business
may be any size, typically all large firms are these
corporation
the process of measuring, summarizing, and reporting financial information about an economic entity
accounting
collecting and recording data on individual events
aggregating data into summary form
issuing a written report for use by others
measuring
summarizing
reporting
accounting reports are prepared using specific rules which are known as
generally accepted accounting principles
rules that guide the process of recording, summarizing, and reporting
generally accepted accounting principles
non-governmental entity funded by business community that issues financial accounting standards
financal accounting standards board (FASB)
financial statement that reports the firm's financial position as of a certain date
balance sheet
financial statement that shows the firm's resources (assets) and claims on resources (liabilities to creditors and owner's equity) as of a certain date
balance sheet
financial statement that reports the firm's results of operations for a certain period of time
income statement
financial statement that reports the firm's earnings (profit or loss) and the components of earnings for a certain period of time
income statement
financial statement that reports the causes of change in retained earnings for a certain period of time
statement of retained earnings
financial statement that reports the firm's cash inflows and outflows for a certain period of time
statement of cash flow
economic resources owned by the firm that are expected to benefit future time periods
assets
creditors claims on the economic resources owned by the firm (debt)
liabilities
owner's claims on the economic resources owned by the firm (capital)
stockholder's equity, also known as net assets
earnings of business not paid out in dividends
retained earnings
those assets and liabilities that will turn over quickly
current
any asset or liability not classified as current
noncurrent
the average time between acquisition of materials/supplies and the realization of cash from sales for which the materials/supplies were acquired
operating cycle (cash to cash)
cash and other assets expected to be converted to cash, sold, or consumed within one year or the operating cycle, whichever is longer
current assets
all debts due for payment within one year or the operating cycle, whichever is longer
current liabilities
assets = liabilities + stockholders' equity
balance sheet equation
formal heading of balance sheet
firm name
title of statement
date of statement