Book 1, Chapter 4 - Accounting Methods Flashcards
FASB
Financial Accounting Standards Board
Statements of Financial accounting Concepts
2 methods of accounting
Cash-basis accounting
Accrual accounting
Key difference between cash-basis and accrual accounting
Point at which you record revenue and expenses in your books
Point of recording in cash-basis accounting
When cash changes hands
Point of recording In accrual accounting
Revenue when earned
Expenses when incurred
Matching principle
Revenue should be matched with expenses incurred to produce the revenue regardless of when cash changes hands
Accrual revenue Earned criterion
Earned is when the vendor performs on the contract -?Vendor delivers the goods or services
Reliable us when the company has good reason to believe it will receive payment - edit card swiped and PIN entered
GAAP
Generally Accepted Accounting Principles
GASB
Government Accounting Standard Board
Expropriation
Seizure of company assets by the host government
Blocked funds
Host government does not allow company funds to be repatriated to the United States
CONs
FASB - Statements of Financial Accounting Concepts or Concept Statements
3 Basic Financial Statements
Income Statement (Profit & Loss)
Balance Sheet
Statement of Cash Flows
4 components of an Income Statement
Revenues
Expenses
Gains
Losses
3 Sections of a Balance Statement
Assets
Liabilities
Equities
