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jeremy harmon > Accounting WOB test > Flashcards

Accounting WOB test Flashcards

1
Q

Accounting

A

Measuring, interpreting and communicating financial information to support internal and external decision making

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2
Q

Bookkeeping

A

Keeping financial records

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3
Q

What are the 3 goals of accounting

A

Analysis
Interpretation
Using information

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4
Q

What are the 3 steps of accounting?

A

Measurement
Processing
Communication

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5
Q

What are the 3 public accounting areas?

A

Audit
Tax
Consulting

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6
Q

What does GAAP stand for?

A

Generally
Accepted
Accounting
Principal

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7
Q

What is the definition of GAAP?

A

Standards and practices used by publicly held corporations in US in preparation of financial statements

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8
Q

What does IFRS stand for

A

International
Financial
Reporting
Standards

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9
Q

What is the definition for the IFRS

A

Accounting standards and practices used in many countries outside the U.S

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10
Q

What is the main difference between the GAAP & IFRS

A

GAAP- used in US only

IFRS- used outside US

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11
Q

External Auditors

A

Outside people brought in to determine if financial statements agree with GAP

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12
Q

Financial Accounting

A

Prepares financial information for users outside the organization

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13
Q

Management Accounting

A

Prepare data for use by managers within the organization

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14
Q

What is the main difference between financial and management accounting?

A

Financial = outside organization

Management = inside organization

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15
Q

Sarbanes- Oxley

A

Legislation to improve integrity and accountability of financial information

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16
Q

Assets

A

Anything of value that a business owns

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17
Q

Liabilities

A

Anything a firm owes

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18
Q

Owners Equity

A

Portion of a companies assets that belong to the owners

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19
Q

Assets = —– + ——–

A

Assets = Liabilities + owners equity

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20
Q

What are the two terms that describe matching principal?

A

Accrual and Cash basis

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21
Q

Accrual Basis

A

Revenue and expenses are recorded when transaction happens

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22
Q

Cash basis

A

Revenue and expense are recorded when money is recieved

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23
Q

What is the difference between accrual and cash basis

A

Accrual = recorded when transaction happened

Cash- recorded when money is received

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24
Q

Depreciation

A

Dollar amount of assets declining in value

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25
Q

Financial Accounting

A

Prepares financial information for users outside the organization

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26
Q

Management Accounting

A

Prepare data for use by managers within the organization

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27
Q

What is the main difference between financial and management accounting?

A

Financial = outside organization

Management = inside organization

28
Q

Sarbanes- Oxley

A

Legislation to improve integrity and accountability of financial information

29
Q

Assets

A

Anything of value that a business owns

30
Q

Liabilities

A

Anything a firm owes

31
Q

Owners Equity

A

Portion of a companies assets that belong to the owners

32
Q

Assets = —– + ——–

A

Assets = Liabilities + owners equity

33
Q

What are the two terms that describe matching principal?

A

Accrual and Cash basis

34
Q

Accrual Basis

A

Revenue and expenses are recorded when transaction happens

35
Q

Cash basis

A

Revenue and expense are recorded when money is recieved

36
Q

What is the difference between accrual and cash basis

A

Accrual = recorded when transaction happened

Cash- recorded when money is received

37
Q

Depreciation

A

Dollar amount of assets declining in value

38
Q

Financial statement explains…

A

A companies performance and conditions

39
Q

Balance Sheet

A

Statement of a firms financial positions made up of assets, liabilities and equity

40
Q

Fiscal year

A

Any 12 consecutive months

41
Q

Current Assets VS Fixed

A

Current: items that can be turned into cash WITHIN 1 year

Fixed Assets: assets acquired for long term use

42
Q

What are 3 examples of fixed assets?

A

House, land, machinery

43
Q

Current VS Long Term Liabilities

A

Current Liabilities- obligations due WITHIN a year

Long Term Liabilities: obligations due in LONGER than a year

44
Q

What 2 terms describe owners equity

A

Common stock and retainer earnings

45
Q

Common Stock VS Retainer Earnings

A

Common stock = stock of a company

Retainer Earnings = equity company holds on to

46
Q

Income statement =

EQUATION

A

Revenue - expenses = net earnings

47
Q

Cost of goods sold is the..

A

Cost of producing or acquiring a product

48
Q

Gross Profit / Gross Margin =

A

Sales - cost of goods sold

49
Q

What does EBITDA stand for?

A 
Earnings
Before
Interest 
Taxes 
Depreciation 
Amortization
50
Q

Net income (aka bottom line) =

A

Revenue- expenses

51
Q

Statement of Cash Flow

A

Shows where cash is spent and made

52
Q

True or False

Companies interpret GAP the same

A

False

All companies interpret GAP differently

53
Q

What are financial statements used for?

A

Evaluating a companies financial health

54
Q

Return on Sales =

A

net sales

55
Q

Return on Equity =

A

total owners equity

56
Q

Earnings per share =

A

average number of shares

57
Q

Working capital =

A

Current assets - current liabilities

58
Q

Current Ratio is

A

Current Liabilities

59
Q

Quick Ratio (3 parts) =

A

Current Liabilities

60
Q

Inventory Turnover Ratio =

A

average inventory

61
Q

Accounts Receivable Turnover Ratio

A

Average accounts receivable

62
Q

Debt to Equity Ratio

A

Total Equity

63
Q

Debt to Asset Ratio

A

Total Assets

64
Q

What kind of cash basis does Mikes Bikes use?

A

On a modified cash basis

65
Q

In Mikes Bikes share price is a function of…

A

Profitability and Riskiness

jeremy harmon (108 decks)

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