Accounting Terms - Accounting Terms Owners equity owners...

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Accounting Terms Owners equity – owners claims on assets Stockholders equity – owners equity in a corporation Retained earnings – part of owners equity that represents the income earned less dividends Statement of cash flows – statement that summarizes company’s cash receipts and cash payments Going concern – assumption that an entity is not in the process of liquidation and that it will continue indefinitely Cost principle – assets are recorded at the historical (original) cost Understandability -quality of accounting information that makes in comprehensible Relevance – capacity of information to make a difference in a decision Reliability – quality that makes accounting info dependable in representing the events that it purports to represent Comparability – allows a user to analyze two or more companies and look for similarities and differences Depreciation – process of allocating the cost of a long term tangible asset over its useful life Consistency – quality that allows a user to compare 2 or more accounting periods for a single company Materiality – magnitude of an accounting info omission that will affect the judgment of
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This note was uploaded on 11/07/2011 for the course ACCT 151 taught by Professor Largay during the Spring '07 term at Lehigh University .

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Accounting Terms - Accounting Terms Owners equity owners...

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