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Acc 6010 > Exam 1 Material > Flashcards

Exam 1 Material Flashcards

1
Q

For internal users, focuses on decision making for the manager to make business decisions

A

Managerial Accounting

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2
Q

For external users; reporting back to investors / resource owners. Follows GAAP

A

Financial Accounting

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3
Q

GAAP

A

Generally Accepted Accounting Principles

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4
Q

group of people or entities organized to exchange items of value

A

Market

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5
Q

provide financial resources to a business in exchange for ownership of the business

A

Investors

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6
Q

lend financial resources to a business. Expected to be repaid with interest.

A

Creditors

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7
Q

natural resources in different stages of transformation

A

Physical Resources

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8
Q

intellectual and physical labor

A

labor Resources

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9
Q

parties interested in the operations of a business, including owners, employees, suppliers, customers, and government agencies

A

Stakeholders

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10
Q

resources used in operations

A

Assets

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11
Q

Assets =

A

Liabilities + Common Stock + Retained Earnings

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12
Q

Liabilities + Stockholders’ Equity =

A

Assets

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13
Q

obligations of a business; creditors claim on assets

A

Liabilities

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14
Q

represents the owners claim on assets

A

Stockholders Equity

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15
Q

basic class of corporate stock, carrying no preference

A

Common Stock

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16
Q

includes all earnings retained in the business since inception

A

Retained Earnings

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17
Q

owners and creditors inters in business assets

A

Claims

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18
Q

Span of time covered by the financial statements, normally one year, but may be by quarter, month

A

Accounting Period

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19
Q

Land is recorded at…

A

Historical Cost

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20
Q

price we paid for the assets

A

Historical Cost

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21
Q

market value as of the end of accounting period

A

Fair Value

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22
Q

Creditors are always paid…

A

First

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23
Q

Tell investors what the performance (earnings) of the company was over the accounting period

A

Income Statement

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24
Q

Tell us where we at the end of the accounting period, what our assets are, what liabilities we have, and our stockholders equity

A

Balance Sheet

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25
Q

Cash inflows and outflows from transactions with investors and creditors

A

Financing Activities

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26
Q

cash inflows & outflows for everyday normal business operations

A

Operating Activities

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27
Q

cash inflows & outflows associated with buying or selling long term assets

A

Investing Activities

28
Q

Accounting system that recognizes expenses or revenues when they occur regardless of when cash is exchanged.

A

Accrual Accounting

29
Q

Recognition of events before exchanging cash

A

Accrual

30
Q

Recognition of Revenue or expense in a period after cash is exchanged

A

Deferral

31
Q

Revenues - Expenses =

A

Net Income

32
Q

to recognize an expense before we pay it

A

Accrued Expenses

33
Q

transaction that decreases one claim and increases another, so that the total claims did not change

A

Claims exchange transaction

34
Q

The Accounting Cycle

A
  1. Record Transactions
  2. Adjust Accounts
  3. Prepare Statements
  4. Close Temporary Accounts
35
Q

recognizing expenses in the same accounting period as the revenues they provide using three methods: Matching expenses directly with revenues (cost of goods sold); Matching expenses to the period in which they incurred (rent expenses) ; and matching expenses systematically with revenues (depreciations )

A

Matching Accounts

36
Q

liability arising when customers pay cash in advance for services a business will perform in the future

A

Unearned Revenue

37
Q

The economic benefit (increase in assets or decrease in liabilities) gained by providing goods or services to customers.

A

Revenues

38
Q

Companies that buy and resell merchandise inventory

A

Merchandising Business

39
Q

supply of finished goods held for resale to customers

A

Merchandising Supply

40
Q

companies that sell goods to other business

A

retail companies

41
Q

Companies that sell goods to other businesses

A

Wholesale Companies

42
Q

Revenue - Cost of Goods Sold

A

Gross Margin

43
Q

all costs related to obtaining or manufacturing a product intended for sale to a customers. Accumulated in inventory accounts and expensed as costs of goods sold at the point of sale

A

Product Costs

44
Q

Costs that cannot be directly traced to products that are recognized as expenses in the period with they are incurred. Ex: advertising, rent

A

Selling and Administrative Costs

45
Q

General selling and administrative costs that are expensed in the period in which the economic sacrifice is made

A

Period Costs

46
Q

(Beginning Inventory Balance + Inventory purchased during the period + Transport-in) - purchase returns - allowances and purchase discounts =

A

Cost of Goods Available for sale

47
Q

the total costs paid to obtain goods and to make them ready for sale, including the cost of beginning inventory plus businesses and transportation-in costs, less purchase returns, allowances and purchase discounts

A

Cost of Goods Available for sale

48
Q

Total cost incurred for the goods sold during a specific accounting period

A

Cost of Goods Sold

49
Q

Difference between sales revenue & cost of goods sold; the amount a company makes from selling goods before subtracting operating expenses

A

Gross Margin ( Gross Profit)

50
Q

method of accounting for inventories that increases the inventory account each time merchandise is purchased and decreases it each time merchandise is sold

A

Perpetual inventory system

51
Q

A reduction in the cost of purchases resulting from dissatisfaction with merchandise purchased

A

Purchase allowances/ Purchase returns

52
Q

discount offered on merchandise said to encourage prompt payment; offered by sellers and represents sales discounts to seller when they are used & purchase discounts to the purchaser of merchandise

A

Cash discount

53
Q

2% discount off the gross invoice if paid within 10 day. full amount due in 30 days

A

2/n, n/30

54
Q

Reduction in the gross price of merchandise extended under the condition that the purchaser pay cash for the merchandise within a stated time.

A

Purchase discounts

55
Q

Discount Rate( 365 days / Term of the loan) =

A

Annual Rate

56
Q

When we (the business) buys goods

A

Transportation-In

57
Q

when we (the business ) sells goods

A

Transportation-Out

58
Q

The buyer pays shipping

A

FOB Shipping

59
Q

The seller pays shipping

A

FOB Destination

60
Q

reflects decreases in inventory for reasons other than sales to customers

A

Shrinkage

61
Q

increase in assets or decrease in liabilities that results from peripheral or incidental transaction

A

gain

62
Q

decrease in assets or increase in liabilities that results from peripheral or incidental transactions

A

loss

63
Q

cash discount extended by the seller of goods to encourage prompt payment

A

Sales Discount

64
Q

sales less returns from customers and allowances or cash discounts given to customers

A

Net Sales

65
Q

amounts are converted to percentages to allow a better comparison of period-to-period or company-to-company financial data is placed on a common basis.

A

Common Size of Financial Statements

66
Q

method of accounting for changes in the inventory account only at the end of the accounting period

A

Periodic Inventory system

67
Q

schedule that reflects the computation of the amount of cost of goods sold under the period inventory system; an internal report not shown in the formal financial statements

A

Schedule of Cost of Goods Sold

Acc 6010 (1 decks)

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