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Management 100 > Chapter 16: Understanding Accounting And Finanical Information > Flashcards

Chapter 16: Understanding Accounting And Finanical Information Flashcards

1
Q

Accounting

A

The recording, classifying, and interpreting of financial events and transactions to provide management the information they need to make good decisions

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2
Q

Accounting professions working areas (5)

A 
Managerial accounting 
Financial accounting 
Auditing 
Tax accounting 
Government and not-for-profit accounting
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3
Q

Managerial accounting

A

Accounting used to provide information and analyses to managers inside the organization to assist them in deification making

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4
Q

Financial accounting

A

Accounting information and analyses prepared for people outside the organization

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5
Q

Annual report

A

A yearly statement of the financial condition, progress, and expectations of an organization

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6
Q

Private accountant

A

An accountant who works for a single firm, governor agency, or not for profit organization

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7
Q

Public accountant

A

An accountant who provides his or her accounting services to individuals or businesses on a few basis

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8
Q

International financial reporting standards (IFRS)

A

The common set of accounting principles, standards, and procedures that accountants use to compile financial statements

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9
Q

Auditing

A

The job or reviewing and evaluating the records used to prepare a company’s financial statement

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10
Q

Independent audit

A

An evaluation and unbiased opinion about the accuracy of a company’s financial statement

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11
Q

Forensic accounting

A

Relatively new area of accounting that focuses its attention on fraudulent activity

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12
Q

Tax accountant

A

An accountant trained in tax law and responsible for preparing tax returns or developing tax strategies

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13
Q

Government and not for profit accounting

A

Accounting system for organizations whose purpose is not generating a profit but rather serving ratepayers, taxpayers, and others according to a duly approved budget

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14
Q

Canada has 3 legacy professional accounting designations. What are they?

A

Chartered accountant
Certified management accountant
Certified general accountant

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15
Q

Chartered professional accountant designation

A

The internationally recognized Canadian accounting designation

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16
Q

Accounting cycle

A

Six step procedure that results in the preparation and analysis of the major financial statements

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17
Q

Bookkeeping

A

Recording of business transactions

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18
Q

Journal

A

Record book where accounting data are first entered

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19
Q

Double entry bookkeeping

A

Have records in two known spots

Spanny with math marks

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20
Q

Ledger

A

Specialized accounting book in which information from accounting journals is accumulated into accounts and posted so the managers can find all of the information about a specific account in one place

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21
Q

Trial balence

A

Summary of all the data in the account ledger to show whether the figures are correct and balenced

22
Q

Financial statement

A

Summary of all of the transactions that have occurred over a particular period

23
Q

3 key business statements

A

Balence sheet
Income statement
Statements of cash flow

24
Q

Fundemental accounting equation

A

Assets = liabilities + owners equity

This is the basis for all balence sheets

25
Q

Accounts

A

Different types of assets, liabilities, and owners equity

26
Q

Balance sheet (AKA financial position)

A

The financial statement that reports a firms financial condition at a specific time and is composed of three major types of accounts:

Assets, liabilities, and owners equity

27
Q

Assets

A

Economic resources (things of value) owned by a firm

Equipment, buildings, land

28
Q

Liquidity

A

The ease with which an asset can be converted into cash

29
Q

3 types of assets

A

Current assets
Fixed assets
Intangible assets

30
Q

Current assets

A

Items that can or will be converted into cash within one year

31
Q

Fixed assets

A

Assets that are relatively permanent, such as land, building, and equipment

32
Q

Liabilities

A

What the business owes to others (debts)

33
Q

Common liability accounts (3)

A

Accounts payable
Notes payable
Bonds payable

34
Q

Accounts payable

A

Current liabilities or bills a company owes others for merchandise or services purchased on credit but not yet paid for

35
Q

Notes payable

A

Short term or long term liabilities that a business promises to repay by a certain date

36
Q

Bonds payable

A

Long term liabilities that represent money lent to a firm that must be paid back

37
Q

Owners equity

A

The amount of the business that belongs to the owners minus any liabilities owed by the business

38
Q

Retained earnings

A

Accumulated earnings form a firms profitable operations that remain in the business and age not paid out to shareholders as dividends

39
Q

Income statement (statement of earnings)

A

The financial statement that shows a firms profit after cost, expenses, and taxes

40
Q

Net income / net loss

A

Revenue left over after all costs and expenses, including taxes, are paid

41
Q

Cost of goods sold (cost of goods manufactured)

A

Measure of the cost of merchandise sold or cost or raw material and suppliers used for producing items for resale

42
Q

Gross profit (gross margin)

A

How much a firm earned by buying (or making) and selling merchandise

43
Q

Operating expenses

A

Costs involved in operating a business, such as rent, utilities, and salaries

44
Q

Depreciation

A

The systematic write off of the cost of a tangible asset over its estimated useful life

45
Q

Statements of cash flow (cash flow statements)

A

Financial statement that reports cash receipts and cash disbursements related to a firms three major activities (operations, investing, and financing

46
Q

Cash flow

A

The difference between cash coming in and going out of a business

47
Q

Ratio analyses

A

The assessment of a firms financial condition using calculations and interpretations of financial ratios developed from the firms financial statements

48
Q

Liquidity ratio

A

Measure a company’s ability to turn assets in cash to pay short term debts

49
Q

5 main areas of accounting

A 
GO FIN(D) A TAX MAN
Government, financial, auditing, tax, managerial
50
Q

Accounting equation (and describe it with 100$)

A

Assets = liabilities + owners equity
Assets is the total money you have.
Liabilities is the 40$ your friend gave you (that you need to pay back one day) and owners equity is the money you started with, so the $60 in your wallet

Management 100 (17 decks)

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