Chapter 8: Accounting Flashcards
balance sheet
financial statement that reports the financial position of a firm by indentifying and reporting the value of the firm’s assets, liabilities, and owner’s equity –> equation: assets=liabilities+equity
income statement
reports the revenues, expenses, and net income that resulted from a firm’s operations over an accounting period
statement of cash flows
identifies a firm’s sources and uses of cash in a given accounting period
horizontal analysis
compares account values reported on these statements through two or more years to identify changes and trends
out-of-pocket cost
payment of money or other resources
implicit cost
payment of money or other resources
fixed cost
cost that remains the same when the level of production changes
variable cost
costs that vary directly with the level of production
direct cost
incurred directly as the result of some specific cost object
indirect cost
result of a firm’s general operations and are not directly tied to any specific object
qualified opinion
auditor identifies minor issues
unqualified opinon
financial statements are accurate and compliant
adverse opinion
financial statements are not reliable and contain significant mistakes-records violate GAAP rules
