Meg's Accounting Flashcards

Front 1

Comparable Info

Back 1

info that can be compared bc similar accounting methods have been used

Front 2

Conservatism

Back 2

to try and not overstate assets and revenues and understate liabilities and expenses

Front 3

Consistent Info

Back 3

info that can be compared over time bc similar accounting methods have been used

Front 4

Cost-Benefit Constraint

Back 4

benefits of accounting for and reporting info should outweigh the costs

Front 5

Cumulative Effects of Changes in Accounting Methods

Back 5

the amount that an account is effected when using different methods

Front 6

Discontinued Operations

Back 6

financial results from the disposal of a major segment of the business and are reported net of income tax effects

Front 7

Extraordinary Items

Back 7

gains and losses that are both unusual in nature and infrequent in occurence (reported net of tax)

Front 8

Earnings Forcasts

Back 8

predictions of earnings for future accounting periods

Front 9

Form 8-K

Back 9

report used by publicly traded companies to disclose any material event not previously reported

Front 10

Form 10-K

Back 10

annual report that publicly traded companies must file with SEC

Front 11

Form 10-Q

Back 11

quarterly report that publicly traded companies must file with SEC

Front 12

Income before Income Taxes (Pretax Earnings)

Back 12

revenues- all expenses (except income tax expense)

Front 13

Income from Operations (Operating Income)

Back 13

net sales - cost of goods sold + other operating expenses

Front 14

Institutional Investors

Back 14

managers of pension, mutual, endowment,and other funds that invest on behalf of others

Front 15

Lenders (Creditors)

Back 15

suppliers and financial institutions that lend money to companies

Front 16

Material Amounts

Back 16

amounts that are large enough to influence a user's decision

Front 17

Paid-in Capital

Back 17

amount of contibuted capital - the par value

Front 18

Par Value

Back 18

legal amount per share est by the board of directors (est the min amount a stockholder must contribute and has no relationship to the market price of the stock)

Front 19

Press Release

Back 19

a written public news announcement that is normally distributed to major news services

Front 20

Private Investors

Back 20

individuals who purchase shares in companis

Front 21

Relevant Info

Back 21

info that can influence a decision

Front 22

Reliable Info

Back 22

info that is accurate, unbiased, and verifiable

Front 23

Unqualified/Clean Audit Opinion

Back 23

auditor's statement that the financial statements are fair presentations in all material respects in conformity with GAAP

Front 24

Accounts Receivable

Back 24

open acc owed to the business by trade customers

Front 25

Aging of Accounts Receivable Method

Back 25

estimates uncollectible acc based on the age of each acc receivable

Front 26

Allowance for Doubtful Accounts

Back 26

Contra-asset acc containing the estimated uncollectible acc receivable

Front 27

Bad Debt Expense

Back 27

expense associated with estimated uncollectible acc receivable

Front 28

Bank Reconciliation

Back 28

process of verifying the accuracy of both the bank statement and the cash accounts of the business

Front 29

Bank Statement

Back 29

monthly report from a bank that shows deposits recorded, checks cleared, other debits and credits, and running bank balance

Front 30

Cash

Back 30

money and any instrument that banks will accept for deposit and immediately credit to the company's account, such as a check, money order, or bank draft

Front 31

Cash Equivalents

Back 31

short-term investments with original maturities of 3mo. or less that are readily convertible to cash and whose value is unlikely to change

Front 32

Internal Controls

Back 32

company's important ppl give reason to rely on their financial reporting, effectiveness and efficiency of its operations and its compliance w/ applicable laws and regulations

Front 33

Notes Receivable

Back 33

written promised that require another party to pay the business under specified conditions (amount, time, interest)

Front 34

% of Credit Sales Method

Back 34

bases bad debt expense on historical % of credit sales that result in bad debts (easier method)

Front 35

Sales/Cash Discount

Back 35

cash discount offered to encourage prompt payment of an acc receivable

Front 36

Sales Returns and Allowances

Back 36

reduction of sales revenue for return of or allowances for unsatisfactory goods

Front 37

Average Cost Method

Back 37

avg unit cost of the goods available for sale for both cost of goods sold and ending inventory

Front 38

Cost of Goods Sold Equation

Back 38

BI+P-EI= COGS

Front 39

Direct Labor

Back 39

earnings of employees who work directly on the products being manufactured

Front 40

Factory Overhead

Back 40

manufacturing costs that are not raw material or direc labor costs

Front 41

Finished Goods Inventory

Back 41

manufactured good that are completed and ready for sale

Front 42

FIFO (first in first out)

Back 42

assumes oldest units are first sold

Front 43

Goods Available for Sale

Back 43

beginning inventory + purchases (or transfers to finished goods) for the period

Front 44

Inventory

Back 44

tangible property held for sale in the normal course of business of used in producing goods or services for sale

Front 45

LIFO (last in first out)

Back 45

assumes that the most recent are sold first

Front 46

LIFO Reserve

Back 46

contra-asset for the excess FIFO over LIFO inventory

Front 47

Lower of Cost or Market (LCM)

Back 47

valuation method departing from cost principle that recognizes a loss when replacement cost or net realizable value drops below cost

Front 48

Merchandise Inventory

Back 48

goods held for resale in the ordinary course of business

Front 49

Net Realizable Value

Back 49

the expected sales sales price - selling costs (repairs, disposal costs)

Front 50

Periodic Inventory System

Back 50

ending inventory and cost of goods sold determined at the end of the acc per based on a physical invetory count

Front 51

Perpetual Inventory System

Back 51

a detailed inventory record maintained recording each purchase and sale during the acc per

Front 52

Purchase Discount

Back 52

cash discount received for prompt payent of an acc payable

Front 53

Purchase Returns and Allowances

Back 53

a reduction in the cost of purchases associated with unsatisfactory goods

Front 54

Raw Materials Inventory

Back 54

items acquired for the purpose of processing into finished goods

Front 55

Replacement Cost

Back 55

current purchase price for identical goods

Front 56

Specific Identification Method

Back 56

identifies the cost of the specific item that was sold

Front 57

Work in Progress Inventory

Back 57

goods in the process of being manufactured