Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
17 Cards in this Set
- Front
- Back
|
What is the flow of accounting info?
|
1. People make decisions
2. Business transactions occur 3. Company reports results |
|
|
What is GAAP? Who uses it?
|
GAAP is generally accepted accounting principles. it's used by publicly traded companies
|
|
|
What led to the creation of the SEC? What is the SEC?
|
1929, Great Depression. Securities and Exchange Commission.
|
|
|
What is FASB, what does it do?
|
Financial Accounting Standards Board, they set GAAP
|
|
|
What are the 4 components of a financial statement?
|
1. Income Statement
2. Statement of Stockholder's Equity 3. Balance Sheet 4. Cash Flow |
|
|
What is the (1) income statement?
|
It is all about operations.
Net Income = Revenue - Expenses |
|
|
What is the (2) Statement of Stockholder's Equity?
|
Ending Retained Earnings = Beginning Retained Earnings + Net Income - Dividends
It's about how much the company has after making money |
|
|
What are dividends?
|
Money paid out to the stockholders
|
|
|
What is the (3) Balance Sheet?
|
Assets = Liabilities + Owner's Equity
where O.E = Common stock + Retained earnings |
|
|
What defines an asset?
|
It's anything that has a future economic benefit
|
|
|
What are accounts receivable?
|
Money we are owned by customers
|
|
|
What's the difference between inventory and supplies? Are they assets or liabilities?
|
Inventory is sold, supplies are used
Inventory is an asset because it will be sold for revenue. Supplies are an asset because they are used in the present or future to benefit. When purchased, they are an expense. |
|
|
What does pre-paid rent count as?
|
It's an asset. WHen you pay it in advance, it's an expense for that cycle but after that, it's an asset because you paid it ahead so when the time comes, you are *benefitting* because it's been paid in advance
|
|
|
What is a liability?
|
It's an obligation, something we owe.
|
|
|
What are notes receivable? What are they classified as?
|
They are loans and therefore an asset. Of BoA gives us a loan, it is listed under notes receivable as an asset
|
|
|
What are the first 3 components of a financial statment?
|
1. Income Statement
2. Statement of Stockholder Equity 3. Balance Sheet |
|
|
What are the abbreviated equations for the first 3 components of a financial statement?
|
1. IS: NI = R - E
2. SSE: E.R.E = BRE + I - D 3. BS: A = L + O.E (OE = CS + E.R.E) |
