Chapter_5_-_Terms_and_Questions_Answers

Chapter_5_-_Terms_and_Questions_Answers - Chapter 5 -...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
List of Terms 1. Financial accounting - Financial accounting is the language used by companies to communicate their financial performance to the public 2. Balance sheet - Reports the financial positions of a company at a specific date in time. It distinguishes the amount of assets, liabilities and equity at the date of the financial statement. 3. Income statement - Reports the revenues, expenses, and net income (or loss) over a specific period of time. 4. Statement of cash flows - Reports the sources and the uses of cash throughout the period. 5. Statement of retained earnings - Reports the changes in an organization’s accumulated earnings for the reported period. 6. GAAP - Generally Accepted Accounting Principles are broad guidelines; conventions, rules, and procedures of accounting that are gathered from various accounting standards and other authoritative organizations. 7. Assets - Economic resources owned by a firm that are measurable and likely to produce future economic benefits. Assets are reported on the balance sheet. 8. Liabilities - Probable future obligations of a firm. Liabilities are reported on the balance sheet. 9. Equity - Owner’s residual interest in assets of a business entity. Equity is reported on the balance sheet. 10. Revenue - Inflows of assets or settlements of liabilities during a particular accounting period. 11. Expenses - Outflows of assets or incurrence of liabilities during a particular accounting period. 12. Net Income (loss) - Represents the excess of revenues over all related expenses. 13. Auditing - Review of the financial statements by independent third party. Auditors provide a professional opinion as to whether the financial statements fairly present the results of the operations of the company. 14. 10 – K - Annual company report, including all financial information, management discussion, and synopsis of operations. 15. 10 – Q - Quarterly company report, including all financial information, management discussion, and synopsis of operations. 16. Cash accounting - Records revenue/loss in the period when physical cash changes hands. Cash accounting is not GAAP. 17. Accrual accounting - Recognizes revenue/loss caused by an economic event and records it in the period in which the event occurred. Accrual accounting is the only method accepted by GAAP. 18. Current assets - Includes cash and other assets that are expected to be realized in cash or be sold or consumed during the normal operating cycle of the business or within one year from the balance sheet date, whichever is longer. 19. Inventory - A company's merchandise, raw materials, and finished and unfinished products which have not yet been sold. 20.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 5

Chapter_5_-_Terms_and_Questions_Answers - Chapter 5 -...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online