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99 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Debt Ratio |
Total laib./ total Assets = debt ratio % |
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FASB Financial Accounting Standards Board |
Makes up the rules of accounting GAP |
GAP |
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SEC Security Exchange Commission |
Oversees the stock market. |
Stock market |
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CPA Certified Public Accountant |
Licensed professional accountants who serve the public. |
Licensed professional |
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What is accounting? |
It's the language of business. |
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What does the Income statement report? |
It reports the net income or income loss. |
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How does the income statement report the net income or net loss? |
Revenues minus expenses |
Equation to get the net income or net loss. |
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What is another word for payroll expense? |
Wage expense |
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What is revenues? |
Earnings from operations. |
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What is expenses? |
Its resources used to earn revenue. |
Used |
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What is expenses? |
Its resources used to earn revenue. |
Used |
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What does Net mean? |
It means subtract |
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What does INC stand for at the end of business's name? |
It means the company is registered for stock. |
Stock |
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What does distribution mean? |
Dividends |
What you pay to stock holders. |
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What does distribution mean? |
Dividends |
What you pay to stock holders. |
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In what order does the retained earnings statement go? |
Beginning retained earnings Net income -dividends = ending retained earnings. |
Beginning to end |
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What does distribution mean? |
Dividends |
What you pay to stock holders. |
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In what order does the retained earnings statement go? |
Beginning retained earnings Net income -dividends = ending retained earnings. |
Beginning to end |
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Formula for Average of Assets |
Beginning assets + Ending Assets/ 2 |
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What are assets? |
Things you own. |
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Liquidity |
How fast it will turn to cash. |
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Liquidity |
How fast it will turn to cash. |
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Accounts receivable |
Already provided services, but customer hasn't paid yet. |
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What are notes? |
Loans |
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What is equity? |
Assets that an owner has after the outsiders have been paid. |
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What is equity? |
Assets that an owner has after the outsiders have been paid. |
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Investors |
Provides money to get a business started |
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What is equity? |
Assets that an owner has after the outsiders have been paid. |
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Investors |
Provides money to get a business started |
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Creditors |
Any person or business to whom a business owes money. |
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What is equity? |
Assets that an owner has after the outsiders have been paid. |
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Investors |
Provides money to get a business started |
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Creditors |
Any person or business to whom a business owes money. |
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Taxting authorities |
Money collected by local, state, and federal government. |
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CMA's certified management accountant's |
Specialize in accounting and financial management knowledge. Works for one company. |
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CMA's certified management accountant's |
Specialize in accounting and financial management knowledge. Works for one company. |
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What is the definition of accounting equation? |
Measures the resources of the business and claims to these resources. |
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CMA's certified management accountant's |
Specialize in accounting and financial management knowledge. Works for one company. |
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What is the definition of accounting equation? |
Measures the resources of the business and claims to these resources. |
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Balance Sheet |
List of business assets, liabilities and stockholders equity as of a specific date, usually the end of the month, quarter or year |
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Common stock |
Represents the basic ownership of a corporation |
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Common stock |
Represents the basic ownership of a corporation |
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Corporation |
A business organize under state law that is separate from legal entity |
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Common stock |
Represents the basic ownership of a corporation |
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Corporation |
A business organize under state law that is separate from legal entity |
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Cost principle |
Assets and services should be recorded at their actual cost |
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Economic entity assumption |
An organization that stands apart as a separate economic entity |
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FASB Financial accounting standards Board |
Freddy organization that oversees the creation and governance of Account standards in the United States |
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Going concern assumption |
Assume the entity will remain in operation for the foreseeable future |
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Going concern assumption |
Assume the entity will remain in operation for the foreseeable future |
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Limited liability company |
Each owner is only liable for his or hers own action. Meaning they are not personally liable for the debts and liabilities of the LLC as a whole. |
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Monetary unit assumption |
Requires the items on the financial statements to be measured in terms of a monetary unit |
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Monetary unit assumption |
Requires the items on the financial statements to be measured in terms of a monetary unit |
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Partnership |
A business with two or more owners and not and organize Corporation |
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Sole proprietorship |
Business with a single owner |
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ROA formula |
Net income / average total assets |
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Dead Crls |
Debit Credit Expenses Revenue Assets Liability Dividends Stock |
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Dead Curls |
Debit Credit Expenses Revenue Assets Liability Dividends Stock |
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Left side of the balance sheet increases with _____ and the right side increases with the ______ |
Debits , credits |
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Dead Curls |
Debit Credit Expenses Revenue Assets Liability Dividends Stock |
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Left side of the balance sheet increases with _____ and the right side increases with the ______ |
Debits , credits |
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In what order must you produce these reports? - statement of retained earnings - balance sheet - income statement |
1. Income statement 2. Retained earnings 3. Balance sheet
Net income you get from 1, you plug it into 2, then you use retained earnings from 2 to calculate 3 |
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Dead Curls |
Debit Credit Expenses Revenue Assets Liability Dividends Stock |
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Left side of the balance sheet increases with _____ and the right side increases with the ______ |
Debits , credits |
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In what order must you produce these reports? - statement of retained earnings - balance sheet - income statement |
1. Income statement 2. Retained earnings 3. Balance sheet
Net income you get from 1, you plug it into 2, then you use retained earnings from 2 to calculate 3 |
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Current ratio formula |
Current assets / assets |
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Dead Curls |
Debit Credit Expenses Revenue Assets Liability Dividends Stock |
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Left side of the balance sheet increases with _____ and the right side increases with the ______ |
Debits , credits |
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In what order must you produce these reports? - statement of retained earnings - balance sheet - income statement |
1. Income statement 2. Retained earnings 3. Balance sheet
Net income you get from 1, you plug it into 2, then you use retained earnings from 2 to calculate 3 |
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Current ratio formula |
Current assets / assets |
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What are the three types of activities presented on the statement of cash flow's? |
Financial, operational, and investment activities |
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Dead Curls |
Debit Credit Expenses Revenue Assets Liability Dividends Stock |
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Left side of the balance sheet increases with _____ and the right side increases with the ______ |
Debits , credits |
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In what order must you produce these reports? - statement of retained earnings - balance sheet - income statement |
1. Income statement 2. Retained earnings 3. Balance sheet
Net income you get from 1, you plug it into 2, then you use retained earnings from 2 to calculate 3 |
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Current ratio formula |
Current assets / assets |
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What are the three types of activities presented on the statement of cash flow's? |
Financial, operational, and investment activities |
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The time period concept |
Accounting information is reported at regular intervals |
Financial statements can be prepared monthly, quarterly or anually. |
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Examples of Accrued expenses |
Ex. Employee wages, utilities and income taxes |
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Four types of adjustments |
Prepaid expenses, accrued expenses, unearned revenue's, and accrued revenues |
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How is the balance sheet set up? |
On the left goes the assets and total assets, on the right goes liabilities, then underneath that goes stockholders equity which is common stock and retained earnings, and underneath that goes total liabilities and stockholders equity. |
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What are the steps to the accounting cycle? |
1)Analyze business transactions (financial statement & retained earning) 2) Journalize 3) Post accounts- T-accounts 4) Trial Balance (debits & credits) 5) Adjusting Entries (Adjusted Trial Balance) |
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Define Revenue Recording |
Report rev. when it is earned, regardless if paid. |
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Matching Principle |
Report expenses when they are incurred. |
AKA Accrued expenses |
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What is the Normal Side of an account?
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The side that increases
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In what order do you enter the transactions in a Trial Balance Sheet? |
Assets= Liab. + Stockholders Equity |
Accounting equation |
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What does Debt Ratio show? |
Shows the proportion of assets that have debt.
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Compound Journal Entry |
a journal entry that has multiple debits or credits. |
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Ledger |
all the accounts of a business, the changes in those accounts, and their balances.
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T-account |
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What is Posting? |
transfering amounts from the journal to the t-accounts. |
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Chart of accounts |
a list of all accounts with their account numbers. |
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What is Interest Revenue an Equ., Liab., or Asset? |
Equity |
Increases Credit (CR) |
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What is Dividends? A, L, or E? |
Equity |
Increases Debit (DR) |
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What is Prepaid Rent? A, L, or E? |
Asset |
Increases Debit (DR) |
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Is Cash Basis allowed under GAAP? Generally Accepted Accounting Principle |
NO. |
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Expenses are recorded when cash is paid and Revenue is recorded when cash is received. |
Cash Basis |
NOT ALLOWED UNDER GAAP |
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Used by most business... |
Basis Accounting |
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Basis Accounting |
Revenue is recorded when earned and expenses are recorded when incurred. |
Used by most businesses |
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Revenue Recognition Principle |
you must report all revenues when earned, regardless of when paid or cash is received. |
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Matching Principle |
you must record all expenses when incurred, regardless of when paid. |
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