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29 Cards in this Set
- Front
- Back
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The accumulated net income of a company over its life reduced by the total dividends paid to owners during its life; represent cumulative earnings that have been kept in the company; represent the earned portion of the owners' claims
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Retained Earnings
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Marketplace where buyers and sellers exchange their shares of stock (including the Internet)
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Stock Exchange (Market)
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Description of negative net income
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Net Loss
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Units of ownership in a corporation
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Shares of Common Stock
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A year in the life of a business e.g., January 1-December 31; October 1-September 30; February 1-January 31
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Fiscal Year
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Distributions of a corporation's earnings to owners
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Dividend
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Companies that sell others' products to their customers e.g., Target (big box retail); Macy's (department store); Best Buy (electronics)
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Merchandising Company
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A legal form for a business that separates the owners from the business
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Corporation
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The costs of generating revenue e.g., advertising, rent, salaries
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Expenses
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Cash transactions related to the ordinary conduct of business e.g., receipts from services performed; payments to employees; payments to vendors
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Cash Flow from Operating Activities
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Things of value owned or controlled by a business e.g., cash; inventories; buildings
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Assets
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The cost of borrowing money
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Interest
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Companies that produce the goods they sell e.g., Ford Motor (automobiles); Apple (computers); Proctor & Gamble (household products)
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Manufacturing Company
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Side-by-side reporting of consecutive fiscal period balance sheets
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Comparative Balance Sheets
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A financial statement that shows all cash collected and disbursed during a fiscal period; cash flows are categorized as operating, investing, or financing
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Statement of Cash Flows
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The amount a company earned from providing goods or services
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Revenue (Sales)
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A financial statement that shows changes in the balances of contributed capital and retained earnings during a fiscal period and is structured as follows: 1.Beginning Contributed Capital; 2.Add: Issuance of Common Stock; 3.Ending Contributed Capital; 4.Beginning Retained Earnings; 5.Add: Net Income; 6.Less: Dividends; 7.Ending Retained Earnings
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Statement of Changes in Stockholders' Equity
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Resources used to start a business
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Capital
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Amounts a company owes to parties outside the business e.g., loans; unpaid salaries; supplies purchased on credit
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Liabilities
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Guidelines for financial reporting
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Generally Accepted Accounting Principles (GAAP)
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Cash transactions related to the financing of a business, e.g., issuance of stock to owners; repayment of loan principal
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Cash Flow from Financing Activities
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Cash transactions that involve the acquisition and disposal of long-term assets used in a business e.g., sale of equipment; purchase of land
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Cash Flow from Investing Activities
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An owner's investment in a company
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Contributed Capital
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Income statement structured as follows: 1.Sales; 2.Less: Cost of Goods Sold; 3.Gross Profit; 4.Less: Operating Expenses; 5.Net Income
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Multi-Step Income Statement
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Owners of a corporation
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Shareholder
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Owners' claims to the assets of a company; comprised of contributed capital and retained earnings
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Stockholders' (Shareholders') Equity
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A record of a company's financial position at a particular point in time
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Balance Sheet
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Residual from the deduction of all expenses from all revenues
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Net Income
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A company that does something for its customers e.g., Ameritrade (online brokerage); Price Waterhouse Coopers (accounting & auditing); McKinsey & Co. (management consulting)
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Service Company
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