Management Accounting Flashcards
Resources that either have value or can be used to produce something of value.
Assets
A statement that highlights what a business owes (liabilities), what a business owns (assets), and how much shareholder equity (profits) exists at the time the balance sheet was generated.
Balance Sheet
What the company needed to spend (payments to suppliers, etc.) in order to generate its net sales.
Cost of goods sold
The money going out of the business. An expense could include money spent on raw materials, machinery (like laptops), and especially employee salaries and benefits (such as health insurance).
Expenses
A company’s net sales minus the cost of goods sold.
Gross Margin
Profit before taxes are paid.
Gross Profit
A summary of the money a company brought in (revenue), what it paid out (expenses), and the difference (profit).
Income Statement
Something you can’t touch but still provides business value to your company.
Intangible Asset
An obligation of the company to pay someone else for products or services rendered in the past.
Liability
A figure that indicates whether and how profitable the company has been during the reporting period (fiscal year).
Net income (or net profit)
What’s left to the business owner once the company has paid all its debts.
Owner’s equity (or owner’s capital)
A business’s revenue minus expenses.
Profit
The company’s net income divided by net sales.
Profit Margin
The amount of money (or income) that a company gets from its customers.
Revenue
Something you can touch, like your company’s building or the products in inventory.
Tangible Asset
