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54 Cards in this Set
- Front
- Back
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Financial |
External user, measure value, summarizes past, GAAP, FASB, and summarized data for organization |
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Managerial |
Internal users, adds value, emphasis on future decisions, no GAAP, and detailed |
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Investors |
Provide financial resources in exchange for ownership interest in businesses. Owners expect businesses to return to them a share of the earned income |
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Creditors |
Lend financial resource to businesses. Expect the businesses to repay borrowed resource plus a specified fee called interest |
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Liabilities + stockholders’ equity equals |
Assets |
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Liabilties + common stock + retained earnings equals |
Assets |
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Liabilities + common stock + beg. Re + revenues - expenses - dividends |
Assets |
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Assets are 1500 and liabilities are 700, what is the amount of stockholders’ equity |
1500=700+SE -700 -700 SE=800 |
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Assets are 1700 and stockholders’ equity is 650, what is the liabilities
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1700=L+650 -650 L= 1050 |
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Assets=75000 Liabilities = 23000 RE=17000 Amount of common stock? |
A=L+CS+RE 75000=23000+CS+17000 -23000 -17000 CS=35000 |
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Assets classified Current |
Cash, Account receivable, any receivable, merch inventory, supplies, pre paid anything |
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Assets Investments |
IV in bond, IV in land, IV in corporate stock |
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Assets PPE |
Land, building, equipment |
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Liabilities Current |
All payable, unearned revenue, |
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Equity |
Paid in capital, common stock, PIC In Excess CS, preferred stock, PIC in excess PS, Retained earnings, treasury stock Common stock Retained earnings Dividends |
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Revenues |
Anything that says revenue (sales, service, interest, dividend, rent) Amount earned by a company |
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Expenses |
Anything that says expense Recurring cost, spend money and it’s gone |
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Expense Gains/losses |
Gain/loss from disposal of asset Gain/loss from retirement of debt Gain/loss from sale asset |
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Three elements of equations |
Assets, liabilities, and stockholders equity spilt between common stock and retained earnings |
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Revenue |
Economic benefit a company derives from providing goods and services to its customers |
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Expense |
Economic sacrifice a business incurs in the process if generating revenue |
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Cash(A) |
Amount of actual money that the company has on hand |
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Account receivable (A) |
Amount of money that is owed to the business by its customers |
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Inventory (A) |
Account contains the cost of the items a business has for sale to customers |
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Supplies (A) |
Costs of items a business use in the operation of its business |
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Prepaid insurance (A) |
Account contains the remaining value/cost of the named item that was paid for advance |
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Account payable (L) |
Amount of money the business owes its suppliers purchase things from and receive services |
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Unearned revenue (L) |
Represent services or products that the business owes its customers |
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Notes payable (L) |
Amounts the business owes creditors that is evidenced by a contract |
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Assets |
Resource a business uses to earn money ( creditors, investors, or operations) Things of value (cash, something will turn into cash, something that could turn into cash if you sell it or redeem it |
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Common stock(SE) |
Account contains the amount of money and other assets thar investors invested in the business |
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RE (L) |
Prior year profits that have been reinvested into the company |
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Dividends (SE) |
Amount of cash distributed to stockholders and has a decrease in SE |
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Acquire 1000 cash from issue of common stock |
Cash increase Assets increase Common stock increase SE increase |
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Purchase land for 5000 |
Cash decreases Land increase Assets remained unchanged |
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Borrowed 10,000 cash from bank |
Cash increase Assets increase Notes payable increase Liabilities increase |
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Asset source |
Increase the total amount of assets and increase the total amount of claims |
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Asset exchange |
Decreases on asset and increase another |
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Asset use |
Decrease the total amount of assets and the total amount of claims |
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Income statement |
Revenue-expenses Expense not dividends Net income: revenue exceed expenses Net loss: expense exceed revenues |
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Liabilities |
Obligation a business has to its creditors Amount or services you owe Payable- paid later |
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Retained earning statement |
Beg re+ net income/-net loss-dividends=ending retained earnings |
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Balance sheet |
Assets=liabilities +SE |
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Re broken down |
Revenue-expense |
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Financing |
Need to obtain sources of cash to start a business Inflows: issuing common stock Obtaining cash from owners Borrowing cash from banks
Outflows: Dividends Paying principal on loans |
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Investing: investing money in the business |
Inflows: sale property, plant, equipment Outflow: purchase of property, plant, and equipment |
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Operating |
Inflows: sale and goods or services Outflows: paying cash for expenses |
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Common stock |
Specific commitments made to investors |
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Stockholders |
Investors are referred to as this |
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Stockholders equity |
The businesses commitment to the stockholders |
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Earnings or income |
Net increases in assets generated in operations |
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Losses |
Net decreases in assets caused by operations |
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Dividend |
Distribution of assets generated through earnings |
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RE |
If a business retains assets, it commits those assets for the benefits of stockholders. The increase in these commitments is RE |
