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ACFE - FINANCIAL TRANSACTIONS/FRAUD SCHEMES > Accounting Concepts > Flashcards

Accounting Concepts Flashcards

1
Q

Accounting Equation

A

Assets = Liabilities + Owners Equity

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2
Q

What is owners equity

A

investment of company owner + accumulated profits

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3
Q

Balance sheet

A

snapshot of company’s financial situation

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4
Q

What is asset liquidity

A

how soon expected to be converted to cash

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5
Q

Current assets

A

converted to cash, sold, used up ONE YEAR

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6
Q

Examples of current assets

A

cash, inventory, accounts receivable

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7
Q

Long term assets

A

Not converted to cash within a year

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8
Q

Examples of long term assets

A

fixed assets (PPE, land)
patents, trademarks, good will

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9
Q

Current Liabilities

A

paid within ONE YEAR (Account payable)

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10
Q

Long term liabilities

A

Not due for more than one year (bonds, notes, mortgages)

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11
Q

On balance sheet, what is owners equity

A

Common stock + retained earnings

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12
Q

What is income statement

A

how much profit or loss company had during a quarter or year

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13
Q

Net Income Equation

A

Revenue - Expenses

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14
Q

Gross Profit or Gross Margin Equation

A

Net Sales - COGS

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15
Q

What will profitable company distribute to its owners

A

Dividends

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16
Q

GAAP Revenue Recognition

A

recording revenue when entity satisfies performance obligation = transfers good to customers

17
Q

GAAP Matching

A

recording revenue and expenses in same period

18
Q

GAAP Consistency

A

consistent accounting principles

19
Q

GAAP Full disclosure

A

all information needed for proper evaluation

20
Q

GAAP Going Concern

A

reporting entity may have trouble continuing in business

21
Q

GAAP Departure - Conservatism

A

method that avoids overstating assets/understating liabilities

22
Q

GAAP Departure - Application of Judgement

A

change procedure if strict adherence will produce misleading financial statements

23
Q

GAAP Departure - Materiality

A

strict adherence only when item has significant effects on financial statements

ACFE - FINANCIAL TRANSACTIONS/FRAUD SCHEMES (15 decks)

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