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30 Cards in this Set
- Front
- Back
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The accounting equation |
assets = liabilities + stockholders equity |
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balance sheet |
reports assets, liabilities, stockholders' equity |
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statement of cash flow |
is to provide financial information about the cash receipts and cash payments of a business for a specific period of time |
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cash flow comes from |
operating, investing, financing activities |
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types of assets |
current assets long-term investments property, plant, and equipment intangible assets |
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current assets |
assets that a company expects to convert to cash or use up within the year |
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types of current assets |
-cash -short-term investments (securities) -receivables (notes receivable, accounts receivable, and interest receivable) -inventories -prepaid expenses (insurance and supplies |
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liabilities |
are obligations that the company is to pay within the coming year |
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long-term liabilities |
obligations that a company pects to pay after one year |
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stockholders' equity |
common stock and retained earnings |
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retained earnings |
revenues + expenses - dividends - |
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historical cost |
land, buildings, equipment, and most inventory |
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current replacement cost |
current inventories that have decline in value since acquisition |
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current market value |
financial instruments - stocks and bonds |
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NetRealizable Value |
accountsreceivable |
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present or discounted value |
long-termreceivables, long term payables, and long-term operating assets determined tohave suffered a permanent impairment in value. |
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principal |
the original amount borrowed or invested |
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interest rate |
an annual percentage of the principal |
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time (n) |
the number of years that the principal is borrowed or invested |
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simple interest |
computed on the principal amount only |
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compound interest |
is computed on principal and on any interest earned that has not been paid or withdrawn |
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future value of a single amount |
the value at a future date of a given amount invested, assuming compound interest |
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future value of an annuity |
is the sum of all the payments (receipts) plus the accumulated compound interest on them |
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present value |
is the value now of a given amount to be paid or received in the future assuming compound interest |
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present value of an annuity |
is the value now of a series of future receipts or payments,discounted assuming compound interest |
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straight-line method |
companiesexpense an equal amount of depreciation each year of the asset's useful life |
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Depreciable cost |
representsthe total amount subject to depreciation; it iscalculated as the cost of the asset less its salvage value` |
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declining-balance method |
computesperiodic depreciation using a declining book value |
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Intangible assets |
arerights, privileges, and competitive advantages thatresult from ownership of long-lived assets that do not possess physicalsubstance. |
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amortization |
Thecost of intangible assets with indefinitelives should not be amortized. |
