chapter 11 Flashcards
a comprehensive system for collecting, anaylzying, and communicating financial information
accounting
recording accounting transactions
bookkeeping
organized procedure for identifying, measuring, recording, and retaining financial information
accounting information system
keeps external parties informed about the firm’s financial condition
financial accounting
directed at internal parties- provides information to facilitate planning, forecasting, and decision-making
managerial accounting
examination of financial records to ensure fair representation
auditing
tax return preparation and tax planning
tax services
personal financial planning to business planning
management consulting services
hired as salaried employees, duties cover day-to day accounting needs
private accountants
anything of economic value owned by a firm or individual
asset
any positive difference between a firm’s assets and liabilities
owners equity
any debt owed by a firm or an individual to others
liability
all transactions are entered in two ways showing how they impact assets and liabilities
double-entry bookkeeping system
amounts owed to the firm by customers
account receiable
cost of merchandise acquired for sale but not yet sold
inventory
supplies on hand and rent paid for coming period
prepaid expenses
have a long-term use or value
fixed assets
non-physical assets with economic value (patents, trademarks, franchise fees)
intangible assets
the amount paid for an existing business beyond the value of its other assetsq
goodwill
debts owed by the firm that must be repaid within one year
current liabilities
debts owed by the firm and due in more than one year
long-term liabilities
owners holdings in the firm
owners equity
the formal recording and reporting of revenues in financial statements once the earnings cycle is completed
revenue recognition
expenses will be matched with revenues to show net income for an accounting period
matching
a detailed financial plan of estimated receipes and expenditures for a future period
budget
net income/ total owners equity
return on equity
net income/ sales revenue
return on sales
net income/ number of common shares outstanding
earnings per share
cost of goods/ sold average invetory
inventory turnover ratio
