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22 Cards in this Set
- Front
- Back
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Sources of Accounting Principles
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GAAP
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Dual-Aspect Concept
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A=L+OE
total assets must equal, or balance; action and equal/opposite reaction found in liabilities or owner's equity |
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Net Income
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Revenues - Expenses
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Gross Margin
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Sales Revenue - Cost of Sales
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Money Measurement
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record made only of info that can be expressed in monetary terms
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Going Concern
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assumption about entity; assumption that current resources will be used in its future operations
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Cost Principle/Concept
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companies should record assets at their cost (price paid to acquire)
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Dual Aspect
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A = L + OE
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Assets
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1) must be acquired in transaction
2) economic resource 3) must be controlled by entity 4) objectively measureable |
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BS: Typical Order of Categories-Assets
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Current Assets
PPE Noncurrent Assets |
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BS: Typical Order of Categories-Liabilities
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Current Liabilities
NonCurrent Liabilities |
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BS: Typical Order of Categories-Owner's Equity
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Paid-in Capital or Capital Stock, etc.
Retained Earnings |
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BS: Typical Order of Categories-Current Assets
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Cash
Marketable Securities A/R N/R other receivables Inventories Prepaid expenses |
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BS: Typical Order of Categories-PPE
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Land
Buildings Less: Acc. Building Depreciation Equipment Less: Acc. Equip. Depreciation Net PPE |
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BS: Typical Order of Categories-Noncurrent Assets
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Long-term asset
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BS: Typical Order of Categories-Current Liabilities
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A/P
N/P Taxes Payable Accrued Expenses Deferred Revenue Current portion of long-term debt |
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Accounting Period
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accounting measures activities for specific interval of time;
fiscal year |
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Conservatism Concept
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being conservative with numbers; ex. using small numbers to underestimate rather than overestimate
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Conservatism Principles
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1) Recognize Revenues when reasonably CERTAIN
2) Recognize Expenses when reasonably POSSIBLE |
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Realization Concept
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amount of revenue that should be recognized from a given sale
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Matching Concept
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revenues and expenses should be recognized int he SAME accounting period
expenses should follow the revenues |
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Income Statement Order
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Revenues -
Cost of Sales/COGS = Gross Margin - Expenses = Net Income Statement of Retained Earnings at beginning of period Add: Net Income Less: Dividends =RE at end of period |
