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30 Cards in this Set

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Balance sheet
A financial statement that shows the financial position of an entity at a specific time and is formally called the statement of financial position. It lists all the assets, liabilities, and owners' equity of an entity.
Book value
Also known as carrying value, it is the value of an asset equal to the original cost of an operational asset less the accumulated depreciation related to that asset.
Breakeven point
The point where total revenues are equal to total expenses and net income is equal to zero.
Budget
A detailed plan that shows proposed acquisitions of financial resources and uses of financial resources during a period of time.
Carrying value
Also known as book value, it is the value of an asset equal to the original cost of an operational asset less the accumulated depreciation related to that asset.
Comprehensive income
Includes all changes in owners' equity during a period except those that result from investments by or distributions to owners.
Contra-asset account
Shown as a deduction from its related asset account on the balance sheet.
Contribution margin
In managerial accounting, it equals sales minus variable costs.
Cost of goods sold
The cost of merchandise sold to customers.
Depreciation
The systematic and rational allocation of the original cost of an asset over its expected useful life.
Direct labor
All labor performed by personnel directly involved in production.
Direct materials
Raw materials that are readily identified with an individual product.
Earnings per share
Is reported on the income statement and is determined by dividing net income after taxes by the average number of shares of common stock held by owners during the period.
Fixed costs
Remain constant in total despite changes in the volume of output. The per unit amount of a fixed cost varies as the level of activities changes.
Forecasting
The prediction of a value of a variable in the future that may be based on past values of the variable, values of related variables, or expert judgment. These are needed in business to plan for the future development of the company.
Gains
Revenues that a business may earn that are not part of the normal operations of the business.
Gross margin(gross profit)
Sales of goods minus cost of goods sold.
Income statement
A financial report that summarizes the operations of the business resulting in revenues, expenses, gains, and losses, and shows the increase or decrease in owners' equity resulting from the operation of the business over a period of time (the accounting period).
Job order costing
Used by firms with production that is easily divided into separate projects or batches.
Losses
Expenses that a business may incur that do not result from normal operations of the business.
Manufacturing overhead
Contains all other costs of production that are not in direct labor or direct materials.
Mixed costs
Vary with level of activity but by less than a proportionate amount.
Process costing
Used to cost products in companies that employ a continuous manufacturing process to produce a homogeneous product.
Revenue realization principle
States that revenue is usually recognized only after exchange has taken place or a service has been rendered.
Standard cost
A predetermined estimate of the cost per unit for materials, labor, and manufacturing overhead; the cost that should be incurred to produce a product or perform an operation efficiently.
Statement of cash flows
Explains the differences between the beginning and ending balances of cash (including cash equivalents).
Statement of changes in capital
Shows the changes in the capital account from one period to another in a sole proprietorship or a partnership.
Statement of retained earnings
Shows the changes in retained earnings from one period to another.
Variable costs
Vary in total directly with the level of output. As production increases, the total amount of this will increase proportionately while the per unit cost will remain the same.
Variance
The difference between the standard cost and the actual cost.