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Humanities 2 > ACCOUNTING > Flashcards

ACCOUNTING Flashcards

1
Q

short-term liab. invoices owed to suppliers

A

Accounts payable

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2
Q

paying current portion of loans

A

Loans payable

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3
Q

income received by a company from its sales of goods or the provision of services

A

sales revenue

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4
Q

like buying a plan ticket and them keeping it in this account till the service is made

A

defered revenue

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5
Q

balance of money due to a firm for goods or services delivered or used but not yet paid for by customers

A

accounts receivable

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6
Q

portion of companies fixed assets cost that is being used up during the accounting period shown in the income statement

A

depreciation expense

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7
Q

is a contra- asset which means that it decreases the value of an asset (PPE) on the balance sheet

A

accumulated depreciation

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8
Q

an expense that can be subtracted from an individual’s gross income to reduce the total amount subject to tax. (before applying tax rates)

A

tax deduction

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9
Q

an amount that taxpayers can subtract from taxes owed to the gov. (after applying tax rates)

A

tax credit

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10
Q

gross income (wages, salaries, interest) minus specific deduction (IRA contribution)

A

adjusted gross income

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11
Q

category that defines year tax filing requirements: which tax rates, deductions, and credits that are used in computing the amount of tax paid

A

filing status

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12
Q

a person who entitles a taxpayers to claim dependent-related tax benefits

A

dependent

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13
Q

a standard dollar amounts that non-itemizer taxpayer may subtract from their income before the tax rate is applied.

A

standard deduction

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14
Q

individual dollar amounts that taxpayers ca claim on their tax return to reduce income before the tax rate is applied (charitable contributions, interest on a home mortgage).

A

ITEMIZED DEDUCTION

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15
Q

the dollar amount subjects the tax rates. AGI less standard or itemized deductions

A

taxable income

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16
Q

the total amount of taxes owed divided by total taxable income

A

average tax rate

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17
Q

tax rate applied to the next dollar earned

A

marginal tax rate

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18
Q

tax liab/all income

A

effective tax rate

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19
Q

amount owed in taxes

A

tax liab

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20
Q

tax liab/ taxable income

A

average tax rate

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21
Q

return on equity
“preformance”

A

Net income/total equity

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22
Q

profit margin
“profitability”

A

net income/ sales

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23
Q

asset turnover
“efficiency”

A

sales/ assets

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24
Q

assets to equity
“leverage”

A

total assets/ total equity

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25
Q

income statement, current assets, and short term liab

A

operating

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26
Q

long term assets and PPE

A

INVESTING

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27
Q

debt and equity

A

financing

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28
Q

current ratio

A

current assets/ current liab’s

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29
Q

cash

A

asset

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30
Q

investments

A

asset

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31
Q

accounts receivable

A

assets

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32
Q

inventory

A

asset

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33
Q

prepaid expenses

A

asset

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34
Q

PPE

A

asset

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35
Q

tangible assets

A

asset

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36
Q

operating assets

A

asset

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37
Q

intangible assets

A

asset

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38
Q

days inventroy held

A

days in period/ (cogs/inventory)

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39
Q

days sales outstanding

A

days in period/ (sales/accounts recerivable)

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40
Q

days payable outstanding

A

days in period/(cogs/ACCOUNTS PAYABLE)

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41
Q

accounts payable

A

liab

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42
Q

accrued liab

A

liab

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43
Q

short term debt

A

liab

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44
Q

current portion long term

A

liab

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45
Q

current portion operating lease

A

liab

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46
Q

long term debt

A

liab

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47
Q

operating lease liab

A

liab

48
Q

other long term liab

A

liab

49
Q

deferred revenue

A

liab

50
Q

revenues

A

income statement

51
Q

cogs

A

income statement

52
Q

gross profit

A

income statement

53
Q

SG&A

A

income statement

54
Q

other operating expense

A

income statement

55
Q

operating income

A

income statement

56
Q

invest expense

A

income statement

57
Q

other income net

A

income statement

58
Q

income before income tax

A

income statement

59
Q

income tax

A

income statement

60
Q

net income

A

income statement

61
Q

ROE

A

(profit margin)(asset turnover)(equity multiplier)

62
Q

CASH GAP

A

days inventory held + days sales outstanding - days payable outstanding

63
Q

accruals to asset ratio

A

net income - operating cash flows/ total assets

64
Q

op: -
inv: -
fin: +
cash flow cycle

A

startup

65
Q

op: +
inv: -
fin: +
cash flow cycle

A

growth

66
Q

op: +
inv: -
fin: -
cash flow cycle

A

mature
“cash Cow”

67
Q

op: -
inv: +
fin: - or +
cash flow cycle

A

decline

68
Q

assets
expenses
dividends

A

debit

69
Q

liab
common stock
retained earnings
revenues
contra-assets

A

credit

70
Q

means left

A

debit

71
Q

means right

A

credit

72
Q

assets = liabilities + equity

A

(debit +, credit -) = (debit -, credit +) + (debit -, credit +)

73
Q

retained earnings = net income - dividends

A

(debit - , credit +) = (debit -, credit +) - (debit +, credit -)

74
Q

common stock

A

debit -, credit +
owners equity

75
Q

net income = revenues - expenses

A

(debit -, credit +) = (debit -, credit +) - (debit +, credit -)

76
Q

retained earnings

A

owners equity

77
Q

sales

A

revenue

78
Q

cogs

A

expense

79
Q

debit and credits should equal each other

A

true

80
Q

cash balance on financial statement

A

beginning balance + increase - decrease

81
Q

an account that never closes and is always running

A

normal accounts

82
Q

retained earnings (debits and credits)

A

debit -
credit +

83
Q

revenues (debits and credits)

A

debit -
credit +

84
Q

expense (debits and credit)

A

debit +
credit -

85
Q

dividends (debit and credit)

A

debit +
credit -

86
Q

which type of accounts will be closed?

A

expenses, revenues, and dividends

87
Q

an account that needs to be closed at the end of each period

A

nominal account

88
Q

which types of accounts do not need to be closed?

A

retained earning and accumulated depreciation

89
Q

sales revenue

A

credit

90
Q

insurance expense

A

credit

91
Q

sales of goods or services
collection of understand dividends

A

operating activities
cash inflow

92
Q

purchase of inventory
payment of operating expenses
payment of interest
payment of income taxes

A

operating activities
cash outflow

93
Q

sales of investments
sales of long-term assets
collection of notes receivable
sale of subsidiary

A

investing activities
cash inflow

94
Q

purchase of investments
purchase of long-term assets
lending with notes receivable
cash acquisition of another company

A

investing activities
cash outflow

95
Q

issuance of bonds or notes payable

issuance of stock

A

financing activities
cash inflow

96
Q

repayment of bonds or notes payable

payments to repurchase stock
payment of dividends

A

financing activities
cash outflow

97
Q

net change in cash

A

operating cash flow + investing cashflow + financing cash flow

98
Q

ending cash balance

A

beginning cash balance + net change in cash

99
Q

entitled dividends (preferred stock)

A

par value X dividend rate

100
Q

common stock value

A

number of shares issued x par value

101
Q

what is the proper way to common-size an income statement?

A

divide everything by sales

102
Q

what is the proper way to common-size a balance sheet?

A

divide everything by the assets

103
Q

inventory turnover

A

cogs/inventory

104
Q

days in inventory

A

(days in period)/inventory turnover

104
Q

accounts receivable turnover

A

sales/ accounts receivable

104
Q

days sales outstanding

A

days in period/account receivable turnover

105
Q

accounts payable turnover

A

cogs/accounts payable

106
Q

days payable outstanding

A

days in period/ accounts payable turnover

107
Q

companies that expect to miss the earnings target by a large margin have incentives to manage earnings downward to pile all of the bad earnings news into one year

A

big bath

108
Q

increasing product return, increase the estimated value on investment, increase the useful life of an asset

A

accounting managment

109
Q

decrease the spending on social media ads., delay when inventory is shipped to a customer, move up the date of when investments are sold, decrease employee bonuses

A

real activities managment

110
Q

cooking the books

A

fraudulent accounting

111
Q

which thing is the easiest way to reduce fraud?

A

opportunity

112
Q

designed to keep errors or fraud from occurring in the first place

A

preventative controls

113
Q

designed to detect errors of fraud that has already occurred

A

detective controls

114
Q

average tax rate you are paying on all your income

A

effective tax rate

Humanities 2 (2 decks)

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