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26 Cards in this Set
- Front
- Back
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Accounting Relation
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an equation that expresses components of financial statements in terms of other components
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Articulation
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the way financial statements relate to each other
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Asset
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an investment that is expected to produce future payoffs
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Capital Gain
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the amount by which the price of an investment changes
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Common Stock Outstanding
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the stock held by common shareholders and is equal to common shares issued less shares in treasury stock
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Comprehensive Income
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total income reported (in the income statement and elsewhere in the financial statements)
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Conservative Accounting
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the practice of recording relatively low values for net assets on the balance sheets, or omitting assets altogether
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Dirty Surplus Accounting
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accounting method that books income in the equity statement rather than the income statement
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Expense
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value given up in earning revenue that is recognized in the financial statements
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Fair Value
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the term that accountants use for the value of an asset or liability; fair value is the market value, or an estimate of market value when a liquid market does not exist
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Flows
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Within the financial statements, changes in stocks between two points in time
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Historical Cost Accounting
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accounting method that records assets and liabilities at their historical cost, then amortizes the cost over periods to the income statement
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Intangible Asset
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an asset without physical form
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Liability
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a claim on payoffs from the firm other than by the owners
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Mark-to-Market Accounting
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accounting method that records assets and liabilities at their market value
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Market Value Added
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the amount by which shareholder wealth increases in the market, plus any dividend received
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Matching Principle
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the accounting principle by which expenses are matched with the revenues for which they are incurred
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Net Payout
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cash distributed to shareholders
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Reliability Criterion
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the accounting principle that requires assets, liabilities, revenues, and expenses to be booked only if they can be measured with reasonable precision based on objective evidence
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Revenue
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value received from customers that is recognized in the financial statements
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Revenue Recognition Principle
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the accounting principle by which revenues are recognized in the income statement
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Shareholder Value Added
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the intrinsic value added to shareholders' wealth during a period
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Stock Return
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the return to holding a share, and it is equal to the capital gain plus dividend
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Stockholders' Equity
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the claim on payoffs by the owners of the firm
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Stocks
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balances at a point of time in the financial statements
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Treasury Stock
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stock that has been repurchased but not retired
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