Accounting Vocab Chpt 2

Front 1

Current Assets

Back 1

Assets that companies expect to convert cash or use up within one year or the operating cycle, whichever is longer

Front 2

Current Liabilities

Back 2

Obligatetions that a company expects to pay within the next year or operating cycle, whichever is longe.r

Front 3

Earning Per Share (EPS)

Back 3

A measure of the net income on each share of common stock; computed as net income minus preferred dividends divided by the average number of common share outstanding during the year.

Front 4

Full Disclosure Principle

Back 4

Accounting principle that dicates the companies disclose circumstance and events that make a difference to financial statement users.

Front 5

Going Concern Assumption

Back 5

The Assumption that the company will continue in operation for the forseenable future

Front 6

Historical Cost Priniple

Back 6

An accounting principle that states that companies should record assets at their cost.

Front 7

Intangible Assets

Back 7

Assets that do not have physical subatance

Front 8

Liquidity

Back 8

The ability of a company to pay obligations that are expected to become due within the next year or operating cycle.

Front 9

Long-Term Investments

Back 9

Generally, 1. investmentss in stocks and bonds of other corporations that companies hold for more then one year; 2. Long-term assets, such as land and buildings, not currently being used in the company's operations; and 3. Long-term notes receivable

Front 10

Long-Term Liabilities

Back 10

Obligations that a company expecred to pay after one year.

Front 11

Monetary unit Assumption

Back 11

An assumption that require that only those things that can be expressed in money are included in the accounting records.

Front 12

Periodicity Assumption

Back 12

An Assumption that the life of a business can be divided into artificial time period and that useful reports converting those periods can be prepared for the business

Front 13

Property, Plant, and Equipment

Back 13

Assets with relatively long useful lives that are currently used in operating the business.