accounting chapter 7 Flashcards
financial accounting
The area of accounting focuses on reporting information to external users.
managerial accounting
The area of accounting focuses on reporting information to internal users.
statement of owner’s equity
A financial statement that reports the changes in the capital account for a proprietorship for some time
financial ratio
A comparison between two components of financial information.
ratio analysis
The calculation and interpretation of a financial ratio.
vertical analysis
Reporting an amount on a financial statement as a percentage of another item on the same financial statement.
return on sales (ROS)
The ratio of net income to total sales.
stakeholders
Any persons or groups who will be affected by an action.
budget
A financial road map used by individuals and companies as a guide for spending and saving.
surplus
A positive balance that remains after total expenses are subtracted from total income.
deficit
A negative balance that remains after total expenses are subtracted from total income.
interim financial statements
Financial statements providing information for a time period shorter than the fiscal year.
