Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

39 Cards in this Set

  • Front
  • Back
Accounts Receivable
Selling merchandise or services on credit;recorded as debt
Allowance Method
Provides an expense for uncollectible receivables in advance of their write-off.
Contra Asset
An account that affects the assets accounts,such as the allowance for uncollectable accounts receivable or accumulated depreciation.
Uncollectable accounts expense
Theh operating expense incurred because of the failure to collect receivables.
Acceleration depreciation method
declining-balance method; the decline in an assets productivity or earning power is greater in the early years of its use than in later years.
The amount of cost to transfer to expense
Book value
cost less than accumulated depreciation; net amount
fixed assets
long term or relatively permanent assets
intangable assets
assets that dont physically exist.
Residual Value
At the end of its expected useful life must be estimated at the time the asset is placed in service
Straight-line method
provides for the same amount of depriciation expense for each year of the assets useful life.
The creditor sets a rate of interest and deducts the interest from the face amount of the note.
quick assets
cash, cash equivalents, and receivables that can be quickly converted into cash
cash dividend
A cash distribution of earnings by a corporation to it is shareholders.
common stock
only one class of stock is issued; each share of common stock has equal rights
cumulative preferred stock
A right to receive regular dividends that were not paid in prior years before any common stock dividends are paid.
Shares of stock that have an assigned amount
when a stock is sold for more than its par value
Stated Value
a value similar tp par value, approved by the board of director of a corporation for No-par stock
Consolidated Financial Statements
At the end of the year, th efinancial statements of the parent and subsidiary are combined and reported as a single company.
discontinued operations
a gain or loss from disposing of a business segment or component of an entity is reported on the income statement as a gain or loss.
Earnings Per Common share
The net income per share of common stock outstanding during a period
Extraordinary Items
Events or transactions that are significantly different from the typical or normal operating activities of a business or occur frequently.
fixed assets impairment
occurs when the fair value of a fixed asset falls below its book value and is not expected to recover.
Restructuring charge
costs associated with involuntary terminating employees, terminating contracts, consolidating facilities, or relocating employees.
taxable income
a corporation is determined according to tax laws and is reported to taxing authorities on the corporations tax returns.
Cash Flows From Financial Activities
Cash flows form transactions that affect the net income.
Cash Flows from investing activities
cash flows from transactions that affect the investments in noncurrent assets.
cash flows from operating activities
cash flows from transactions that affect the equity or debt of the business.
direct method
reports the sources of operating cash and the uses of operating cash
Free Cash Flow
A measure of operating cash flow available for corporate purposes after providing sufficient fixed asset additions to maintain current productivity capacity and dividends
Indirect Method
Reports sources of operating cash and the uses of operating cash
Statement of cash flows
reports a firms major cash inflows and outflows for a period.
Common size statement
All items are expressed in percentages
horizontal analysis
Teh percent analysis of increases and decreases in related items in comparative financial statements
The difference in the rate on stockholders equity and the rate on total assets.
Teh ability of a business to earn income.
The ability of a business to meet its financial obligations
Vertical analysis
a percent analysis may also be used to show the relationship of each component to the total within a single statement; statements may be prepared in either detailed or condensed form.