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24 Cards in this Set
- Front
- Back
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GAAP (generally accepted accounting principles) must include |
*balance sheet - statement of financial position *income statement- statement of activities *comprehensive income statement- which includes income state and other comprehensive income terms *statement of changes in retained earnings *cash flow statement |
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FASB (financial accounting standards board) is |
the accounting standard setting body for US GAAP |
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IASB (International accounting standards board) is |
the accounting standard setting body for standards which are used by over half of the nations in the world for their publicly traded companies |
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SEC (securities exchange commission) |
regulates publicly traded companies. financial statements of publicly traded companies must be filed with the SEC. annual report is filed on form 10k for a us company and 20f if foreign listed on us stock exchance |
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assets= |
liabilities + equities. is the basis of the double entry accounting system that uses debits and credits |
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debits must always equal |
credits |
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on a financial statement anything that is opposite the normal sign is ... |
put into brackets to inform the reader |
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owners of corporations are referred to as |
shareholders or stockholders |
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owners of an LLC are called |
members |
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costs concept means |
transactions are recorded at the actual amount paid or to be received from the economic activity |
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dividends are |
a distribution of profits by a corporation to the shareholders |
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GAAP statements must be on the |
accrual basis. the cash basis is only allowed for certain business for tax purposes |
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matching concept says that |
the expenses related to the revenue earned must be recorded in the same reporting period
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accounting systems prepared under GAAP are based on |
the doubly entry system and use the accrual basis |
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all business needs a chart of |
accounts |
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the chart of accounts lists |
-each asset -liability -equity -revenue -expense account the company has determined they need to provide the detail they need. |
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when economic events occur that affect the assets and liabilities of a company these events are |
journalized by making a journal entry by debiting and credit accounts from the chart of accounts |
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after the entries are journalized ... |
each of the debits and credits to the accounts are posted in the general ledger in that account. |
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T accounts can be used to
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represent the accounts in the general ledger.
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general ledger |
summarizes but also retains the detail of all of the transactions that occurred that affect that account
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trial balance: |
is prepared using all of the accounts in the general ledger |
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horizontal analysis |
uses the account balances from two or more years to analyze the results of the business operations over time |
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the cashbasis of accounting,
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revenues and expenses are reported on the income statement in the period in which cash is received or paid. 益.
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the matching concept
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The accounting concept supporting reporting revenues and related expenses in the same period is called
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