• 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

Card Range To Study



Play button


Play button




Click to flip

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;

34 Cards in this Set

  • Front
  • Back

Classified balance sheet

Groups together similar A & L, using a number of standard classification and sections

-Presents a snapshot at a point in time

-Improve understandin by grouping similar A & L

Current Assets

Assets that are to be used or converted into cash within 1 year or operation cycle (shorter one)

*List C.A. in the order by liquidity first*

Current assets ex (5)





5.prepaid expenses

Current Liabilities

Obligations to pay someone within the next year/operation cycle

Operating Cycle

The average time required to go from cash to cash in producing rev- to purchase inventory

Long-Term Investments (3)

1) investments in stock and bonds of other corporations that are held for more than 1 yr

2) Long term assets such as land and buildings that a company is not currently using in oper act

3) Long term notes receivable


Assets with long useful lives that are currently used in operating a business


Allocation of the cost of an asset to a # of years

Accumulated depreciation

Shows total amt of depreciation that a company has expensed thus far in the assets life

Intangible assets

-Assets that do not have physical substance

-Includes goodwill, patents, copyrights, trademarks

Long term Liabilities

Obligations that a company expects to pay AFTER 1 year

Retained earnings

Income kept for use in the business

Stockholders equity

common stock plus retained earnings

Ratio Analysis

Expresses the relationship among selected items of financial statement data

-A single ratio by itself is meaningless

Profitably ratios

Measures the income of a company in a given period

Earnings per share (EPS) + formula

Measures the net income earned on each share of common stock

*(Net income-preffered dividend) /average # of common shares outstanding*


Current Ratio

CR= Current assets / Current liabilities

*higher ratio suggest favorable liquidity*


Debt to Assets Ratio

Measures the % of total financing provided by creditors rather than stockholders

*DTAR= Total liabilities / total assets*

-*If 52%, every dollar of assets is followed by 52 cents of liability *


Working Capital + formula

-The diff between the amts of CA and CL

*W.C.= Current Assets - Current liabilities*

Liquidity Ratio

Measures short-term ability to pay obligations and to meet unexpected needs for cash


Ability to pay interest as it comes due and to repay the balance of a debt due at its maturity

Solvency Ratio

Measure the ability of the company to survive over a long period of time

Free cash flow + formula

A measurement to provide additional insight regarding a companies cash-generating ability

*FCF= (cash provided by operations) -

(Capital expenditures) -

(Cash dividends)

Generally accepted accounting principles + 4 boards

A set of rules and practices that the accounting profession recognizes as a general guide for financial reporting purposes

1) SEC

2) Financial acct standards board (FASB)

3) International acct standards board (IASB)

4)International financial reporting standards(Ifrs)

Predictive value

Info that helps provide accurate expectations about the future

Confirmatory value

Info confirms prior expectations


When the SIZE of an item makes it likely to influence the decision of an investor or creditor

Faithful representation

Info accurately depicts what happened


Monetary Unit

Only things that can be expressed in money are included in the accounting records

Economic Entity

States that every economic entity can be separately identified and accounted for


States that the life of a business can be divided into artificial time periods

Historical Cost

Cost principle that dictates companies must record assets at their cost

Fair Value

Indicates that assets and liab should be reported at fair value

Cost Constraint

Weighs the cost that companies will incur to provide the info against the benefit that financial statement users will gain from having the info