Chapter One Flashcards
What is meant by external users of accounting information?
External users of accounting information are individuals and other enterprises that have a current or potential interest in the reporting enterprise, but that are not involved in the day-to-day operations of that enterprise.
What is meant by the return of your investment?
The repayment to an investor of the amount originally invested in another enterprise.
What is meant by return on your investment?
The payment of an amount (interest, dividends) for using another’s money.
What is a Balance Sheet also known as?
The Statement of Financial Position
What does a Balance Sheet show?
The Balance Sheet is a position statement showing where the company stands in financial terms at a specific date.
Also known as a Statement of Financial Position.
What is an Income Statement?
The Income Statement is an activity statement that shows details and results of the company’s profit-related activities for a period of time (e.g.- a month, a quarter, or a year).
What is a Statement of Cash Flows?
The Statement of Cash Flows is an activity statement that details the company’s cash activities during a period of time.
