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40 Cards in this Set
- Front
- Back
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In general terms, what does the Balance sheet show?
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The balance sheet shows what a company owns and what it owes.
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Name some examples of long-term debt
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long term notes, bonds, mortgages, and similar obligations.
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What is depreciation?
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The wear and tear of items since they were originally purchased.
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When deciding whether or not to recognize revenue, what are the two questions you must answer?
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1) Is the promised work done?
2) Before recognizing revenue, cash must have been collected. |
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How would you twist the accounting equation to get Stockholder's equity?
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Assets - Liabilites =Stockholder's equity.
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Average receivables
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Beginning receivables balance + ending balance / 2
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The company's resources can also be called -
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Assets
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Times interest earned = income / interest expense for the period and tells you what?
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The number of times the company can make its interest payments - a higher number reflects a greater likelihood that the company can meet future interest obligations
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What do you call a listing of an organization's assets and of its liabilities at a certain time?
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Balance Sheet
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What is a company's "Financial mix?"
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The percentage of total financing (liabilities plus equity) in each individual category.
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What are expenses?
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The amount of assets consumed from the performance of business operations; the opposite of revenues.
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The do you call the money made (or lost) on activities outside the normal business of a company?
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Gains and Losses
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Return on Assets
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net income / total assets
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Return on Assets is computed as net income / total assets and tells you what?
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The number of pennies made on each dollar of assets.
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Focus of financial accounting is on three primary financial statement. Name them
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Balance Sheet, The income statement, statement of cash flows
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If the company is public, what do you call the owner's equity?
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stockholder's equity
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In general terms, what does the statement of cash flows show?
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It outlines where a company gets its cash and how it spends that cash.
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Average Collection Period
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Average receivables / average daily sales
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Owners withdraw assets
Company suffers a loss These actions will... |
Decrease Owner's equity
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What do you call the difference between revenues and expenses?/
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Net Gain or Net Loss
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What do you call the difference between assets and liabilities?
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Equity
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The practice of accounting in the US involves adherence to established accounting rules set by...
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The FASB
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What do you call amounts owed to a business by its credit customers that are usually collected in cash within 10 to 60 days?
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Accounts receivable
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Debt ratio = total liabilities / total assets and tells you what?
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the percentage of total funds, both borrowed and invested that a company acquires through borrowing.
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The _________ ratio is the single measure that summarizes the financial status of a company.
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Return on Equity = net income / equity
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Current Ratio
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Current Assets / Current Liablities
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Quick Ratio
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Quick Assets / Current Liabilities
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Net Working Capital Ratio
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Net Working Capital / Total Assets
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Return on Assets (ROA)
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Net Income / Average Total Assets
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Return on Equity (ROE)
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Net Income / Average Stockholders' Equity
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Return on Common Equity (ROCE)
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Net Income / Average Common Stockholders' Equity
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Profit Margin
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Net Income / Sales
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Earnings Per Share (EPS)
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Net Income / # of Common Shares Outstanding
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Assets Turnover Ratio
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Sales / Average Total Sales
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Accounts Receivable Turnover Ratio
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Sales / Average Accounts Receivable
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Inventory Turnover Ratio
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Cost of Goods Sold / Average Inventories
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Debt to Equity Ratio
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Total Liabilities / Total Stockholders' Equity
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Price Earnings (PE) Ratio
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Market Price of Common Stock Per Share / Earnings Per Share
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Dividend Yield
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Annual Dividends Per Common Share / Market Price of Common Stock per Share
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Dividend Payout Ratio
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Cash Dividends / Net Income
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