Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

57 Cards in this Set

  • Front
  • Back
Comparable Info
info that can be compared bc similar accounting methods have been used
to try and not overstate assets and revenues and understate liabilities and expenses
Consistent Info
info that can be compared over time bc similar accounting methods have been used
Cost-Benefit Constraint
benefits of accounting for and reporting info should outweigh the costs
Cumulative Effects of Changes in Accounting Methods
the amount that an account is effected when using different methods
Discontinued Operations
financial results from the disposal of a major segment of the business and are reported net of income tax effects
Extraordinary Items
gains and losses that are both unusual in nature and infrequent in occurence (reported net of tax)
Earnings Forcasts
predictions of earnings for future accounting periods
Form 8-K
report used by publicly traded companies to disclose any material event not previously reported
Form 10-K
annual report that publicly traded companies must file with SEC
Form 10-Q
quarterly report that publicly traded companies must file with SEC
Income before Income Taxes (Pretax Earnings)
revenues- all expenses (except income tax expense)
Income from Operations (Operating Income)
net sales - cost of goods sold + other operating expenses
Institutional Investors
managers of pension, mutual, endowment,and other funds that invest on behalf of others
Lenders (Creditors)
suppliers and financial institutions that lend money to companies
Material Amounts
amounts that are large enough to influence a user's decision
Paid-in Capital
amount of contibuted capital - the par value
Par Value
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)
Press Release
a written public news announcement that is normally distributed to major news services
Private Investors
individuals who purchase shares in companis
Relevant Info
info that can influence a decision
Reliable Info
info that is accurate, unbiased, and verifiable
Unqualified/Clean Audit Opinion
auditor's statement that the financial statements are fair presentations in all material respects in conformity with GAAP
Accounts Receivable
open acc owed to the business by trade customers
Aging of Accounts Receivable Method
estimates uncollectible acc based on the age of each acc receivable
Allowance for Doubtful Accounts
Contra-asset acc containing the estimated uncollectible acc receivable
Bad Debt Expense
expense associated with estimated uncollectible acc receivable
Bank Reconciliation
process of verifying the accuracy of both the bank statement and the cash accounts of the business
Bank Statement
monthly report from a bank that shows deposits recorded, checks cleared, other debits and credits, and running bank balance
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
Cash Equivalents
short-term investments with original maturities of 3mo. or less that are readily convertible to cash and whose value is unlikely to change
Internal Controls
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
Notes Receivable
written promised that require another party to pay the business under specified conditions (amount, time, interest)
% of Credit Sales Method
bases bad debt expense on historical % of credit sales that result in bad debts (easier method)
Sales/Cash Discount
cash discount offered to encourage prompt payment of an acc receivable
Sales Returns and Allowances
reduction of sales revenue for return of or allowances for unsatisfactory goods
Average Cost Method
avg unit cost of the goods available for sale for both cost of goods sold and ending inventory
Cost of Goods Sold Equation
Direct Labor
earnings of employees who work directly on the products being manufactured
Factory Overhead
manufacturing costs that are not raw material or direc labor costs
Finished Goods Inventory
manufactured good that are completed and ready for sale
FIFO (first in first out)
assumes oldest units are first sold
Goods Available for Sale
beginning inventory + purchases (or transfers to finished goods) for the period
tangible property held for sale in the normal course of business of used in producing goods or services for sale
LIFO (last in first out)
assumes that the most recent are sold first
LIFO Reserve
contra-asset for the excess FIFO over LIFO inventory
Lower of Cost or Market (LCM)
valuation method departing from cost principle that recognizes a loss when replacement cost or net realizable value drops below cost
Merchandise Inventory
goods held for resale in the ordinary course of business
Net Realizable Value
the expected sales sales price - selling costs (repairs, disposal costs)
Periodic Inventory System
ending inventory and cost of goods sold determined at the end of the acc per based on a physical invetory count
Perpetual Inventory System
a detailed inventory record maintained recording each purchase and sale during the acc per
Purchase Discount
cash discount received for prompt payent of an acc payable
Purchase Returns and Allowances
a reduction in the cost of purchases associated with unsatisfactory goods
Raw Materials Inventory
items acquired for the purpose of processing into finished goods
Replacement Cost
current purchase price for identical goods
Specific Identification Method
identifies the cost of the specific item that was sold
Work in Progress Inventory
goods in the process of being manufactured