chap 1 and 2 Flashcards
Obligation to transfer cash or other resources as a result of a past transaction.
Liability
Dividends paid by a corporation to its shareholders. It decreases in equity resulting from transfers to owners.
Distribution to owners
Inflow of an asset from providing a good or service.
revenue
the financial position of a company
assets, liabilities, and equity
increase in equity during a period from nonowner transactions
comprehensive income
increase in equity from peripheral or incidental transactions
gain
sale of an asset used in the operations of a business for less than the asset’s book value
loss
the owners’ residual interest in the assets of a company
equity
an item owned by the company representing probable future benefits
Assets
revenues plus gains less expenses and losses
net income
an owner’s contribution of cash to a corporation in exchange for ownership shares of stock
investment by owner
outflow of an asset related to the production of revenue.
expense
faithful representation
agreement between a measure and the phenomenon it purports to represent
consistency
applying the same accounting practices over time
materiality
concerns the relative size of an item and its effect on decisions
