Chapter 1 Flashcards

(29 cards)

1
Q

Net Worth =

A

equity

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2
Q

businesses need initial financial aid which comes in

A

loans, investors, creditors

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3
Q

stakeholders are

A

resource providers

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4
Q

3 types of resources

A

physical
financial
labor

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5
Q

types of accounting

A

financial accounting; focused on needs of external users; investors and creditors
managerial accounting; focused on internal users needs; mangers, employees, unions
nonprofit; beneficiaries, legislators

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6
Q

FASB

A

(The Financial Accounting Standards Board)
generally accepted accounting principles

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7
Q

Assets=

A

liabilities + stockholders equity

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8
Q

stockholders equity holds

A

common stock and retained earnings

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9
Q

general ledger

A

complete collection of a company’s accounts

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10
Q

revenue is

A

sales

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11
Q

an asset source transaction is

A

an event that increases total assets and total claims
ex; issuing common stock for cash

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12
Q

who has priority in liquidations

A

creditors and then investors

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13
Q

going concern doctrine

A

assumes that a business is able to continue its operations into the foreseeable future

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14
Q

Asset Exchange transation

A

decrease one asset and increase another

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15
Q

asset use transaction

A

decrease the total assets and the total claims

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16
Q

income statement

A

the financial statement showing benefits and sacrifices during accounting period

17
Q

permanent and

A

closed accounts

18
Q

balance sheet records

A

assets liabilities and stockholders equity

19
Q

how they use cash is the

A

statement of cash

20
Q

stockholders equity may be subdivided into

A

common stock and retained earnings

21
Q

stakeholders

A

are the users of accounting information

22
Q

Cash flows

A

Operating Activities
Financial Activities
Investing Activities

23
Q

Permanent accounts hold

A

retained earnings

24
Q

accrual accounting

A

recognizing revenue when it is earned and expenses when they are incurred, regardless of when cash changes hands
when a company records a sale of goods as revenue when the goods are shipped to the customer, even though the customer has not yet paid for the goods

25
defferal
some revenue or expense event that recognized after cash has been exchanged, prepaid asset
26
financial accounting
focuses on the external needs of users
27
managerial accounting
focuses on the internal needs of users
28
reporting entities
any business entity that is engaging in Financial Reporting according to some Financial Reporting Standards
29
the permanent accounts include
assets, stockholders equity, and liabilities