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30 Cards in this Set
- Front
- Back
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What is accounting?
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system of COLLECTING, ANALYZING, RECORDING FINANCIAL INFO, and COMMUNICATING that info
for DECISION MAKING. |
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the goal of accounting
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provide INFO that will be USEFUL in MAKING DECISIONS
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financial accounting
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provides info to
EXTERNAL uses TO PEOPLE OUTSIDE the day to day operations of a buisness |
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managerial accounting
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provides info to
COMPANY MANAGEMENT (INTERNAL users) useful in making OPERATING DECISIONS |
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SEC
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Security & Exchange Commision
OVERSEES FINANCIAL MARKETS |
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GAAP
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Generally Accepted Accounting Principle
financial GUIDELINES that are followed when MAKING FINANCIAL STATEMENTS |
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FASB
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Financial Accounting Standard Board
RULE MAKERS of SEC, SET GUIDELINES |
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IASB
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International Accounting Standard Board
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IFRS
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International Financial Reporting Standard
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How is Accounting info provided?
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through FINANCIAL STATEMENTS
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4 different kinds Financial Statements
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INCOME STATEMENT
STATEMENT OF RETAINED EARNINGS BALANCE SHEET STATEMENT OF CASH FLOWS |
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Define CORPORATION
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organization RECOGNIZED by STATE GOVT
ABLE TO SELL SHARES to investors/owners |
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COMPANY Advantages of INCORPORATING
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ability to SELL STOCK
ease of TRANSFER OF OWNERSHIP UNLIMITED life |
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INVESTORS Advantages of INCORPORATING
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ease of TRANSFER OF OWNERSHIP
LIMITED LIABILITY |
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Whate is the 10-K?
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the ANNUAL report of FINANCIAL STATEMENTS to the Securities and Exchange Commission SEC once per year
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Equation:
ASSET |
A=L+SE
(Accounting Equation) |
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Equation:
NET INCOME |
NI=Rev-Exp
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Equation:
GROSS PROFIT |
GP=Sales Rev-COGs
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Equation:
GROSS PROFIT PERCENTAGE |
GP%=GP/salesx100
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Equation:
WORKING CAPITAL |
WC=CA-CL
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Equation:
CURRENT RATIO |
CR=CA/CL
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What are CURRENT ASSETS?
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"LIQUID" assets
form of CASH or what the firm EXPECTS to USE UP/CONVERT TO CASH in ONE YEAR |
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list of CURRENT ASSETS:
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Cash
Marketable Securities/Short Term Investments Accounts Receivable Inventory Prepaid Epenses Supplies |
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What are NON CURRENT ASSETS?
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all assets not current
LONG TERM assets/ FIXED assets |
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list of NON CURRENT ASSETS:
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Land
Buildings Equipment Machinery Office Furniture Land Improvements Intangible Assets (Patents, Copyrights, Trademarks) |
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What are CURRENT LIABILITIES?
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DEBTS that must be paid WITHIN ONE YEAR of the balance sheet date
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list of CURRENT LIABILITIES:
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Accounts Payable
Wages Payable Taxes Payable Interest Payable Unearned Revenue Accured Liabilities (accrued expenses) Notes Payableq |
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What are NON CURRENT LIABILITIES?
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assets that MATURE MORE THAN ONE YEAR from the date of the balance sheet.
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list of NON CURRENT LIABILITIES:
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Notes Payable (long term)
Mortgages Payable Bonds payable |
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list of STOCKHOLDERS EQUITY:
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Common Stock (capital stock)
Retained Earnings |
