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27 Cards in this Set
- Front
- Back
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Balance Sheet Equation |
Assets = Liabilities + Equity |
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Assets |
Resources that the company owns. |
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Liabilities & Equity |
Claims against the resources that the company owns. |
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Liabilities |
Amounts owed to others. |
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Equity |
Claims of the company's owners. |
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Current Liabilities |
Payable within one year from the date of the balance sheet. |
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Current Assets |
Convertible to cash within one year from the date of the balance sheet. |
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Net Income |
Revenues + Gains - Expenses - Losses |
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Revenues |
Amounts earned by the company for performance of services or sales of products |
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Gains |
Earned when assets are sold for more than their book value |
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Expenses |
Costs incurred by the company to produce its revenue |
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Losses |
Incurred when assets are sold for less than their book value or from significant unusual events (law suits or natural disasters) |
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Gross Profit |
Sales Revenue - Cost of Goods Sold (COGS) |
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Income from Operations |
Gross Profit - Operating Expenses |
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Income before Taxes |
Income from Operations +/- other income |
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Net Income |
Income before taxes - income tax expense |
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Net Change in Cash Balance |
Net cash from operating activities + investing activities + financing activities |
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Operating Activities |
Cash received from customers and cash paid for: Inventory Utilities Wages Rent |
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Investing Activities |
Cash received from the sale of long term assets and cash paid to purchase long term assets. Selling Land Buying building |
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Financing Activities |
Debt and Equity Transactions: Borrowing money Paying back loans Selling Stock Buying Back treasury stock Paying Dividends |
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Statement of Stockholders Equity |
All changes in equity accounts during the year including retained earnings |
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Ending Retained Earnings |
Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings |
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LIFO |
Highest COGS Lowest Gross Profit Lowest Net Income Highest Ending Inventory Balance |
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Double Declining Balance Method |
Higher depreciation expense in earlier years |
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Sale of Stock for Cash |
Cash Common Stock (Par Value x Cash) Additional Paid In Capital |
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Repurchase of Treasury Stock |
Treasury Stock Cash |
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Depreciation Expense |
Depreciation Expense Accumulated Depreciation |
