• 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;

23 Cards in this Set

  • Front
  • Back

What are six key things that distinguish a corporation from other forms of business

1. One owner is allowed in a corporation

2. A business is taxed as its own separate entity from the owner 3. A corporation has limited liability

4. A corporation is its own separate business entity

5. A corporation has its own legal entity

6. A corporation can have unlimited life

What is a corporation?

A business legally separate from its owner or owners, meaning it is responsible for its own acts and its own debts. Separate legal status means that a corporation can conduct business with the rights, duties, and responsibilities of a person

What are the accounting principles of accounting assumptions and who made them?

Measurement / cost principle , full disclosure principle, Revenue recognition, expense recognition / matching principal , the going concern assumption , monetary unit, time period, and business entity. And gaap / generally accepted accounting principles made them.

What are two constraints?

Materiality and benefits > cost

What is the focus of financial accounting and for whom?

Financial accounting is the area of accounting aimed at serving external users by providing them with general purpose financial statements

What is the cost principal / measurement principle?

Prescribes that accounting information is based on actual cost

What is the matching principle / expense recognition?

Prescribes that a company record the expenses incurred to generate the revenue reported

What's the accounting equation?

Assets = liabilities + common stock - dividends + Revenue - expenses

What are three functions of an accounting system?

Identify , record , and communicate

What are the four statements?

1. income statement

2. Statement of retained earnings

3. Balance sheet

4. Statement of cash flows

What is in the heading of a financial statement?

First , the name of the company, then under that the name of the statement, then underneath that the date or time period.

What's the return on assets ratio?

Return on assets = net income ÷ average total assets

What is the chart of accounts?

A list of all ledger accounts and includes an identification number assigned to each account

What's the debt ratio?

Debt ratio = total liabilities ÷ total assets

What is a classified balance sheet and what does it contain?

A balance sheet that organizes assets and liabilities into important subgroups that provide more information to decision-makers and contains current assets, long term investments, plant assets, intangible assets, current liabilities, long-term liabilities, and equity.

Accrual basis vs. Cash basis accounting?

Accrual accounting uses the adjusting process to recognize revenues and expenses when incurred but Cash basis accounting recognizes revenues when cash is received and record expenses when cash is paid.

What is the profit margin ratio?

Profit margin = net income ÷ net sales

What is the current ratio?

Current ratio = current assets ÷ current liabilities

What are the elements of a multi-step income statement?

The three main parts are Gross profit , income from operations , and net income

What is the order of a multi-step income statement?

Sales- sales discounts and sales returns and allowances = net sales - cost of goods sold = gross profit - operating expenses = income from operations- other expenses + other revenues = net income

Sometimes in a multi-step income statement operating expenses are divided into what two categories?

Selling expenses and general and administrative expenses

What is the acid test ratio?

Acid test = cash and cash equivalents + short-term Investments + current receivables ÷ current liabilities

What is the gross margin ratio?

Gross margin ratio = net sales - cost of goods sold ÷ net sales