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22 Cards in this Set

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

expenses should follow the revenues
Income Statement Order
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