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34 Cards in this Set
- Front
- Back
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Sole Proprietorship |
owned by one person |
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Partnership |
owned by 2 or more |
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Corporation |
under laws of state or federal government Shares of stock as proof of owneship |
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What are the 3 types of business |
financing, operating, investing |
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Internal users |
users inside company/managerial accounting |
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External users |
outside company/financial accounting
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GAAP |
Generally Accepted Accounting Principles Guide preparation of financial statements |
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FASB |
Financial Accounting Standards Board Develop GAAP in the US |
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IFRS |
International Financial Reporting Standards International set of accounting standards,interpretation,framework |
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Balance Sheet |
list assets,liabilities,SE (accounting equation) |
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Income Statement |
Results of a business of a given time list revenues and expenses/Gains and losses |
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Statement of SE |
Events causing increase or decrease in SE including changes in Common Stock and Retained earnings
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Statement of Cash Flow |
Cash in flow and outflow/ operating,investing,financing/reveals cash spent on operating expenses and cash received from sale of good or services |
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General Journal |
Record with flexibility any type of business transaction can be recorded |
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Trial Balance |
list all accts. from general ledger w/their respective debit or credit balance/prepared at end of accounting period |
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Matching Principle |
Expenses recognized w/sales revenue so they are reported on same income statement |
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Type of adjustments |
Prepaid expense, Unearned revenue, Accrued revenue, accrued expenses |
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defferals |
deal with amounts that have been previously recorded |
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Accruals |
Deals with amounts that have not been previously recorded |
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Adjusted Trial Balance |
General ledger account balances after end of period adjeustments |
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Order of Preperation |
Income statement, Statement of SE, Balance Sheet, Statement of CF |
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Classified Balance sheet |
presents assets and liabilities in subgroups of current and long term |
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Liquidity |
ability of asset to be readily converted into cash |
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single step income statement |
simplest form of income statement sum of expenses subtracted from sum of revenues |
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Multi step income Statement |
Revenues and expenses in list not categories to facilitate financial analysis and management decision making |
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Ratio analysis |
prediction of one relevant accounting number to another (expressed as rate, proportion, % |
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Solvency |
ability to pay long term obligations |
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Free Cash flow |
indicates ability to expand, repay lenders, or pay stock holders dividends |
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Current Ratio |
CA/CL Tells liquidty |
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Solvency |
Total Liab/Total assets Higher the riskier |
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Profitability |
ROS=Net Income/Net sales ROA=Net income/total assets |
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Paid in Capital |
amount of capital contributed to a corporation by its stock holders in excess of its par value or stated value |
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Retained Earnings |
Earnings kept for future corporation use |
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Solve for statement of cash flow |
Free cash flow=CF from operations-capital expenditures
Money left to invest in business |
