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ACCT 6201 Midterm 1

ACCT 6201 Midterm 1 - Term Definition Revenue Sales or...

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Term: Revenue Definition: Sales or Operating Revenue; Increase in equity (and associated increase in assets or decrease in liabilities) resulting from the sale of goods or provision of services to customers; top line of the income statement Term: Expense Definition: Decrease in equity (and associated decrease in assets or increase in liabilities) created by the sale of goods, rendering of services or passage of time. Term: Assets Definition: Resources the firm controls because of a past transaction or event that provides measurable expected future benefits. Term: Liabilities Definition: Creditor's claims or obligations that represent a probable future economic sacrifice of assets or services that is known or can be reasonably estimated and is based on a past transaction or event.
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Term: Shareholders' Equity Definition: Measure of financing provided by owners of the firm that captures owners' residual claim on assets of the firm after satisfying creditors. Term: Accounts on Income Statement (name in order) Definition: (1) Sales/Operating Revenue MINUS (2) Cost of Goods Sold EQUALS (3) Gross Profit (Optional; Revenue - COGS) MINUS (4) Operating Expenses EQUALS (5) Operating Profit/Income MINUS (6) Other Nonoperating Items EQUALS (7) Net Income/Loss Term: Net Income Definition: Also known as earnings, profit, and bottom line; Bottom line of the income statement, gives a "video" of the financial performance over a period of time; accumulated in retained earnings Term: Temporary income statement accounts Definition: Accounts accumulate for a defined period of time and are then zeroed out when the balance is transferred to retained earnings
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Term: Accounts on the Balance Sheet (name in order) Definition: ASSETS: (1) Current Assets, (2) Noncurrent Assets, (3) Total Assets; LIABILITIES: (1) Current Liabilities, (2) Noncurrent Liabilities, (3) Total Liabilities; SHAREHOLDERS' EQUITY: (1) Contributed Capital, (2) Retained Earnings, (3) Accumulated Other Comprehensive Income, (4) Total Shareholders' Equity, (5) Total Liabilities and Shareholders' Equity Term: Balance Sheet Equation Definition: Assets = Liabilities + Shareholders' Equity Term: Statement of Retained Earnings (name in order) Definition: (1) Beginning balance retained earnings PLUS/MINUS (2) Net Income/Loss MINUS (3) Dividends PLUS/MINUS (4) Other EQUALS (5) Ending balance retained earnings Term: Retained earnings in the balance sheet Definition: There is not a corresponding cash fund on the asset section for retained earnings because changes in retained earnings can be associated with changes in any assets or liabilities associated with net income or dividends
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Term: Statement of Cash Flows (name in order) Definition: (1) Cash flow from operations PLUS (2) Cash flow from investing PLUS (3) Cash flow from financing EQUALS (4) Change in Cash PLUS (5) Cash at beginning of year EQUALS (6) Cash at end of year Term: Cost of Goods Sold/Cost of Sales Revenue Definition: First expense listed; cost to the selling firm for goods or services delivered during the period; includes manufacturing/service-related salaries
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