Final Key Definitions Flashcards
Assets=
Liabilities + Stockholder’s equity
common stock+ beg. RE+ Rev- Exp-Dividends =
Stockholders’ Equity
Stockholders’ Equity=
common stock +Retained Earnings (RE)
Ending Retained Earnings =
beg. RE+ net income (or loss) -dividends
Rev-Exp
Net Income
rules that preparers of financial statements must follow in presenting financial statements to external users. determines accounting standards
GAAP
group given authority to oversee PUBLICLY traded companies and financial markets in the u.s. gave the responsibility of writing accounting pronouncements to privae accounting
Securities Exchange Commission (SEC)
primary accounting rule-making body currently responsible for writing pronouncements constituting GAAP in the United States
Financial Accounting Standards Board (FASB)
group that is charged with determining auditing standards and reviewing the performance of auditing firms
Public Company Accounting Oversight Board (PCAOP)
an accounting standard -setting body that issues standards adopted by many countries outside the U.S.
International Accounting Standards Board (IASB)
assets recorded at its original cost (for fixed assets) (Record PPE at historical costs)
Historical cost
the price that would be received to sell or pay for an asset
fair value principal
increases assets, decreases liabilities asset account show normal balance decreases common stock decreases retained earnings increases exp increases dividends
Debit
decreases assets, increases liabilities (liabilities show normal credit balance ) increase common stock increase RE increases rev, decreases exp
Credit
closed to $0 at the end of year
accounts come from income statement: Rev, gains, exp, losses, dividends
temporary account
