Financial Terms Flashcards
Money owed to suppliers of goods and services.
Accounts payable
Money owed to a business for goods and services that have already been provided.
Accounts receivable
Resources that can be measured in monetary terms
Assets
Liquid assets
Resources that can be spent or shifted almost immediately
A complete list of all the accounts a firm is involved in, with each account assigned an identification number; used to quickly locate an account on the ledger.
Chart of accounts
Any resources that a firm typically converts into cash in a period of less than 12 months.
Current assets
The amount of time an employee spends directly involved in the generation of revenue for the firm
Direct labor
The expense of employee salaries added to the cost of mandatory and discretionary expenses and benefits
Direct personal expense
The claims made on the assets of a firm that derive from the cumulative, undistributed earnings of the corporation after dividends have been paid to stockholders; __________ ________ are used to reinvest in the business.
Retained earnings
A dividend distribution that is made voluntarily by the financial organization.
Discretionary distribution
Also known as property, plant and equipment; all of the long-term resources used by a firm.
Fixed assets
All the revenue, before deductions, generated by a firm in a given accounting period.
Gross revenue
Expenses that are paid in the period preceding that in which payment is required; _______ _________ are considered to be assets, because what they have purchased continues to have value for the owner.
Prepaid expense
All the labor, which is not charged to a project or to a revenue producing account.
Indirect labor
Everything owed by a firm because of past transactions or purchases; __________ are assumed to have top priority.
Liabilities
Also known as selling and administrating expenses; all of the cost of doing business that are incurred, regardless of whether a firm produces revenue.
Overhead
The amount of income or loss of income that is calculated after expenses, have been subtracted from revenues; if revenues exceed expenses, there is a ______ _______.
Net income (profit)
Amount of inflows from the sale of goods or services during accounting.
Revenue
All of the resources spent by a firm in an effort to generate revenue.
Expense
Also known as a profit and loss statement; the accounting report that indicates all the revenues and expenses in a given period of time; indicates net, income, or loss during the accounting.
Income statement
The practice of billing, the end-user or client for goods and services required by the interior designer.
Pass through
The costs incurred in the direct generation of revenues.
Cost of sales; Also known as cost of goods sold
The difference between revenues and cost of sales; the _______ _______ is the amount of revenue that is available to cover the selling and administrative costs.
Gross margin
The current assets consisting of all the cash available in bank accounts, checking accounts, petty cash boxes, and cash registers.
Cash
The hard currency used to purchase small items per day today operations.
Petty cash
The measure of the decrease in value of capital equipment overtime.
Depreciation
Like depreciation, this is an indication, that overtime, copyrights, patents, and trademarks diminish in value.
Amortized
All of the debts or obligations, that must be paid within one year typically includes accounts, payable, accrued, liabilities, and miscellaneous debts.
Current liabilities
All the expenses of other people for a given time period that have not yet been paid. For example, the salary for employees that has not yet been paid is considered an ________ _________.
Accrued expense
Any revenue that is received it for a service that has yet to be provided for goods that have not yet been delivered.
Deferred revenues
On a balance sheet, the indication of total investment in a firm by the owners.
Owners equity
In accounting statement that indicates the changes in cash flow during a particular accounting. As a result of operation, financing and investment.
Statement of cash flows
Based on the income statement; includes calculation of businesses, income and expense accounts.
Single-entry bookkeeping
Slightly more complicated system; requires information from accounting, journals and letters; accounts are determined by the entries from the income statement and balance sheet.
Double-entry bookkeeping
On an accounting statement, a particular entry adjusted with additions and subtractions, otherwise known as debts and credits.
Accounts
A chart used by accountants in which the name of the given account is placed at the top, debits are on the left, and credits are on the right; in theory, the debits and credits should be equal
T-account
The notations on the left-hand side of an account
Debit
The notations on the right hand side of an account.
Credit
An accounting document that contains a chronological record of all the transactions made by a firm.
Journal
The shift of a journal entry to the correct ledger account.
Posting
A group of accounts listed in terms of debits and credits
Ledger
An attempt to verify whether the debits are equal to the credits in double-entry ledgers
Trial balance
A technique employed by businesses to decrease payments to creditors, increased collection of cash payments, and generally increase the amount of cash on hand.
Cash management
All of the financial and other statistical data, which would be useful to the management of a firm; used to assess past performance, and to make adjustments to improve the quality of performance in the future.
Performance reports
A comparison of the effects of proposed budget and actual operating expenses on the financial status.
Variance analysis
The situation in which actual costs are greater than standard costs.
Unfavorable variance
A situation in which standard costs are greater than the actual costs
Favorable variance
The calculation of the point at which expenses will exactly equal gross revenue.
Break-even analysis
The conditions under which revenues equal expenses in the firm, has neither net profit, nor net loss
Break-even point
Costs that rise or fall, depending on the amount of business, a company is doing; for instance, flour is a variable cost for a bakery, since more flour will be needed if the bakery increases the amount of bread it is making.
Variable costs
Any costs that remain the same, regardless of whether a business does well or poorly in the short term.
Fixed costs
