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29 Cards in this Set

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What is a buisness stakeholder?
A person or entity that has an interest in the economic performance and well-being of a business. EX. Stockholders, suppliers, customers, and employes.
(Types of Business Stakeholders)
Capital market stakeholders-
Provide the major financing for a business in order for it to begin and continue its operations. Examples on pg. 8-9.
(Types of Business Stakeholders)
Product or service market stakeholders-
Customers who purchase the business's products or services as well as the vendors who supply inputs to the business. Ex. on pg. 9.
(Types of Business Stakeholders)
Government stakeholders-
Cities, counties, states, and federal governments that collect taxes and fees from the business and its employees. Better a business does, the more taxes that can be collected. Other EX. pg. 9.
(Types of Business Stakeholders)
Internal stakeholders-
Individuals employed by the business. EX. pg. 9.
Business Activities
All businesses are engaged in these. They include Financing, investing, and operating.
(Business Activities)
Financing activities-
Involve obtaining funds to begin and operate a business. Pg. 11. Look for example to use.
(Business Activities)
Investing Activites-
Used to obtain the necessary assets to start and operate the business. Pg. 12. Look for example to use.
(Business Activities)
Operating Activities-
Used to implement its business emphasis. Pg. 12. Look for example to use.
What are the four types of financial statements? Pg. 14.
Income statement, Retained earnings statement, Balance sheet, and Statement of cash flows. Normally prepared in that order.
(Financial statements)
Income statement-
More on Pg. 15
A summary of the revenue and the expenses for a specific period of time, such as a month or a year. (Reports change in financial condition.)
(Financial statements)
Retained earnings statement-
More on Pg. 16
A summary of the changes in the earnings retained in the corporation for a specific period of time, such as a month or a year. (Reports change in financial condition)
(Financial statements)
Balance sheet-
More on Pg. 17
A list of the assets, liabilities, and stockholders' equity as of a specific date, usually at the close of the last day of a month or a year. (Reports financial condition.)
(Financial statements)
Statement of cash flows-
More on Pg. 18
A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year. (Reports change in financial condition.)
Horizontal analysis
A method of analyzing financial performance that computes percentage increases and decreases in related items in comparative financial statements. Compares each item on the most recent financial statement withthe related item on one or more earlier statements. The amount of the increase or decrease in each item is shown along with the percent increase or decrease.
Accounting Concepts
Pg. 20-23
Consists of: Business Entity, Cost, Going Concern, Matching, Objectivity, Unit of Measure, Adequate Disclosure, and Accounting Period Concepts.
(Accounting Concepts)
Business Entity Concept-
A concept of accounting that limits the economic data in the accounting system to data related directly to the activities of a specific business or entity.
(Accounting Concepts)
Cost Concept-
A concept of accounting that determines the amount initially entered into the accounting records for purchases.
(Accounting Concepts)
Going Concern Concept-
A concept of accounting that assumes a business will continue operating for an indefinite period of time.
(Accounting Concepts)
Matching Concept-
A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses.
(Accounting Concepts)
Objectivity Concept-
A concept of accounting that requires accounting records and the data reported in financial statements to be based on objective evidence.
(Accounting Concepts)
Unit of Measure Concept-
A concept of accounting requiring that economic data be recorded in dollars.
(Accounting Concepts)
Adequate Disclosure Concept-
A concept of accounting that requires that the financial statements include all relevant data a reader needs to understand the financial condition and performance of a business.
(Accounting Concepts)
Accounting Period Concept-
A concept of accounting in which accounting data are recorded and summarized in a periodic process.
(Impact of various transactions on stockholders’ equity)Chp.2 Pg.61-62
Stockholders' investments-
Increase in Capital Stock, which is an increase in Stockholders' Equity.
(Impact of various transactions on stockholders’ equity)Chp.2 Pg.61-62
Revenues-
Increase Retained Earnings, which is an increase in Stockholders' Equity.
(Impact of various transactions on stockholders’ equity)Chp.2 Pg.61-62
Expenses-
Decrease in Retained Earnings, which is a decrease in Stockholders' Equity.
(Impact of various transactions on stockholders’ equity)Chp.2 Pg.61-62
Dividends-
Decrease in Retained Earnings, which is a decrease in Stockholders' Equity.
Vertical Analysis
Chp.2 Pg.69-71
A method of analyzing comparative financial statements in which percentages are computed for each item within a statement to a total within the statement. These percentages can then be compared across years.