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31 Cards in this Set
- Front
- Back
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Dividends |
cash payment to stockholders |
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net loss |
when expenses exceed revenue |
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Basic Accounting Equation |
Assests= Liabilities + Stockholders Equity |
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Operating Activities |
Revenues, inventory, accounts receivable. Once a company has its resources it can begin operations. |
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common stock |
we have issued stock to the investors |
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retained earnings |
how much the company is actually making after dividends is expenses is subtracted. Same period as income statement or done at the end of a year |
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Liquidity Ratio same as current ratio |
short term ability to pay maturing obligations, meet unexpected cash need. current assets/ current liabilities |
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earnings per share equation or Profitability ratio |
(net income- preferred dividends)/ average common shares outstanding |
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current ratio |
current assests/ current liabilites |
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debt to assests ratio (SOLVENCY RATIO) |
ability for a company to survive over a long period of time total liabilites/total assests |
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Generally Accepted Accounting Principles (GAAP) |
set of standards that are recognized as general guide for financial reporting |
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debit |
left increases assests |
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credit |
right increases liabilities and stockholders equity |
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debit balance |
if debits are greater then credits |
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credit balance |
credits are greater then debits |
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assests |
debit should exceed credits resources owned by business |
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liabilities |
credits should exceed debits anything payable |
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increase stockholders equity (credit) |
investments by stockholders and revenues |
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decrease stockholders equity (debit) |
dividends and expenses |
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Current Assests |
assets that company expects to convert to cash or use up within one year
(cash, notes receivable, supplies, inventory) |
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Double entry system |
debits have to equal credits |
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Why do we do financials statements? |
communication tool to make decisions |
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Income Statement |
reports companies revenues and expenses resulting in net income. for a specific time period |
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Corporation |
separate legal entity owned by stockholders easier to transfer ownership easier to raise funds no personal liability |
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sole proprietorship |
One person simple to establish owner controlled tax advantages |
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internal users |
managers who plan, organize, run a business (Marketing, Human resources, Finance) |
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external users |
Use info to make decisions on investing, selling, holding stock (creditors, investors, tax authorities) |
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Operating Activites |
revenues, inventory, accounts recievable. |
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Financing activites |
borrowing money, selling shares of stock for cash, issuing shares |
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Investing Activites |
infrastructure: property, plant, equipment investments, |
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Balance Sheet |
shows totals of assists, liabilities, stockholders equity. Shows balance for all accounts. MONTHLY |
