Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Principles of Financial Accounting > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Account payable

A

The liability created by a purchase on account

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Account receivable

A

An asset, which is a claim against the customer created by selling merchandise or services on credit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Accounting

A

An information system that provides reports to stakeholders about the economic activities and condition of a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Accounting assumptions

A

Assumptions that provide the framework upon which accounting standards are constructed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Accounting equation

A

The equation that shows the relationship among assets, liabilities, and equity; expressed as Assets = Liabilities + Equity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Accounting principles

A

Principles that provide the framework upon which accounting standards are constructed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Accounting standards

A

The rules that determine the accounting for individual business transactions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Accounting Standards Codification

A

An electronic database maintained by the Financial Accounting Standards Board (FASB) that contains all of the accounting standards that make up the generally accepted accounting principles (GAAP)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Accounting Standards Updates

A

Published changes to accounting standards that are the source of updates to the Accounting Standards Codification

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Arm’s-length transactions

A

Transactions between two independent parties

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Assets

A

The resources owned by a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Balance sheet

A

A list of the assets, liabilities, and stockholders’ equity as of a specific date, usually at the close of the last day of a month or a year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Business

A

An organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Business entity assumption

A

A concept of accounting that limits the economic data in the accounting system to data related directly to the activities of the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Business transaction

A

An economic event or condition that directly changes an entity’s financial condition or directly affects its results of operations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Certified Public Accountant (CPA)

A

Public accountants who have met a state’s education, experience, and examination requirements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Common stock

A

Certificates issued by a corporation to investors as proof of their ownership rights; an account representing the ownership rights of investors in a corporation; a class of stock issued by a corporation that bears no preference rights

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Comparability

A

A secondary characteristic of financial information; comparability includes consistent reporting, that allows users to identify similarities and differences among reported items

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Corporation

A

A business organized under state or federal statutes as a separate legal entity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Cost principle

A

A concept of accounting that states that an asset should be recorded and maintained in the accounting records at its initial transaction price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Data analytics

A

The science of analyzing raw data to discover patterns, identify anomalies, or gain other useful insights

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Dividends

A

Distributions of earnings to stockholders; an account representing the distribution of a corporation’s earnings to stockholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Earnings

A

The amount by which revenues exceed expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Equity

A

The rights of the owners of a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Ethics

A

Moral principles that guide the conduct of individuals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Expense recognition principle

A

A principle, sometimes called the matching principle, that requires expenses to be recorded in the same period as the related revenue; a concept of accounting in which expenses are matched with the revenue generated during a period by those expenses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Expenses

A

Amounts used to generate revenue; assets used up or services consumed in the process of generating revenues

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Faithful representation

A

A characteristic of financial reports that pertains to information accurately reflecting an entity’s economic activity or condition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Fees earned

A

Revenue from providing services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Financial accounting

A

The branch of accounting that is concerned with recording transactions using generally accepted accounting principles (GAAP) for a business or other economic unit and with a periodic preparation of various statements from such records

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Financial Accounting Standards Board (FASB)

A

The authoritative body that has the primary responsibility for developing accounting principles

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Financial statements

A

Financial reports that summarize the effects of events on a business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Financing activities

A

Activities by which a company obtains funds to start and operate the company

34
Q

Fiscal year

A

The annual accounting period adopted by a business

35
Q

Generally accepted accounting principles (GAAP)

A

Generally accepted guidelines for the preparation of financial statements

36
Q

General-purpose financial statements

A

A type of financial accounting report that is distributed to external users. The term “general purpose” refers to the wide range of decision-making needs that the reports are designed to serve

37
Q

Going concern assumption

A

An assumption that requires that financial reports be prepared assuming that the entity will continue operating in the future

38
Q

Historical cost principle

A

A concept of accounting that states that an asset should be recorded and maintained in the accounting records at its initial transaction price

39
Q

Income statement

A

A summary of the revenue and expenses for a specific period of time, such as a month or a year

40
Q

Interest revenue

A

Earnings received for interest

41
Q

International Accounting Standards Board (IASB)

A

An organization that issues International Financial Reporting Standards for many countries outside the United States

42
Q

Investing activities

A

Activities by which a company acquires long-term assets for use in the operating activities of the company

43
Q

Liabilities

A

The rights of creditors that represent debts of the business

44
Q

Limited liability company (LLC)

A

A business form consisting of one or more persons or entities filing an operating agreement with a state to conduct business with limited liability to the owners, yet treated as a partnership for tax purposes

45
Q

Managerial (or management) accounting

A

The branch of accounting that uses both historical and estimated data in providing internal users (management) with information relevant to decision making

46
Q

Manufacturing business

A

A type of business that changes basic inputs into products that are sold to individual customers

47
Q

Measurement principle

A

A principle that requires that amounts be objective and verifiable

48
Q

Monetary unit assumption

A

An accounting assumption that requires that financial reports be expressed in a single monetary unit, or currency

49
Q

Natural business year

A

A fiscal year that ends when business activities have reached the lowest point in an annual operating cycle

50
Q

Net income (or net profit)

A

The amount by which revenues exceed expenses

51
Q

Net loss

A

The amount by which expenses exceed revenues

52
Q

Operating activities

A

Activities by which a company generates revenues from customers

53
Q

Owner’s equity

A

The equity for a proprietorship, partnership, or a limited liability company

54
Q

Partnership

A

An unincorporated business form consisting of two or more persons conducting business as co-owners for profit

55
Q

Prepaid expenses

A

Assets created by making advanced payments for expense items, such as insurance premiums or supplies, that will be used in the business in the future

56
Q

Private accounting

A

The field of accounting whereby accountants are employed by a business firm or a not-for-profit organization

57
Q

Profit

A

The difference between the amounts received from customers for goods or services provided and the amounts paid for the inputs used to provide the goods or services

58
Q

Proprietorship

A

A business owned by one individual

59
Q

Public accounting

A

The field of accounting where accountants and their staff provide services on a fee basis

60
Q

Public Company Accounting Oversight Board (PCAOB)

A

A new oversight body for the accounting profession that was established by the Sarbanes-Oxley Act

61
Q

Ratio of liabilities to stockholders’ equity

A

A comprehensive leverage ratio that measures the relationship of the claims of creditors to stockholders’ equity; a solvency ratio that measures how much of the company is financed by debt and equity, computed as total liabilities divided by total stockholders’ equity

62
Q

Relevant

A

A characteristic of financial reports that pertains to information having the potential to impact decision making

63
Q

Rent revenue

A

Earnings from property that is leased to others for use

64
Q

Report form

A

A form of balance sheet with the “Liabilities” and “Stockholders’ Equity” sections presented below the “Assets” section

65
Q

Retail business

A

A type of business that purchases products from other businesses and sells them to customers

66
Q

Retained earnings

A

The stockholders’ equity created from business operations through revenue and expense transactions; an account representing the net income retained in a corporation

67
Q

Retained earnings statement

A

A summary of the changes in the retained earnings in a corporation that have occurred during a specific period of time, such as a month or a year

68
Q

Revenue

A

Increases in owner’s equity as a result of providing services or selling goods to customers

69
Q

Revenue recognition principle

A

A concept of accounting that states that revenues are recorded when earned, which is when the services have been performed or products have been delivered to customers

70
Q

Sales

A

How revenue from the sale of merchandise is recorded; the total amount charged customers for merchandise sold, including cash sales and sales on account

71
Q

Sarbanes-Oxley Act (SOX)

A

An act passed by Congress to restore public confidence and trust in the financial statements of companies

72
Q

Securities and Exchange Commission (SEC)

A

An agency of the U.S. government that has authority over the accounting and financial disclosures for companies whose shares of ownership (stock) are traded and sold to the public

73
Q

Service business

A

A business providing services rather than products to customers

74
Q

Statement of cash flows

A

: A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year

75
Q

Statement of stockholders’ equity

A

A summary of the changes in the stockholders’ equity in a corporation that have occurred during a specific period of time, such as a month or a year

76
Q

Stockholders’ equity

A

The ownership rights of stockholders in a corporation; the stockholders’ rights to the assets in a corporation

77
Q

Timeliness

A

A secondary characteristic of financial information that requires distribution of financial reports in time to influence a user’s decision

78
Q

Time period assumption

A

An accounting assumption that allows a company to report its economic activities on a regular basis for a specific period of time

79
Q

Understandability

A

A secondary characteristic of financial information that requires clear and concise financial reports that facilitate user interpretation and analysis

80
Q

Understandability

A

A secondary characteristic of financial information that requires clear and concise financial reports that facilitate user interpretation and analysis

Principles of Financial Accounting (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions