miderm definitions Flashcards
GAAP
Generally accepted accounting principles.
FASB
Financial accounting Standard Boards
SEC
Securities and exchange commission.
IASB
International Accounting standard boards.
IFRS
International Financial Report Standards.
Assets
Resources a company owns or controls that provides future economic benefits.
Liabilities
creditors claim on assets.
Equity
owners claim on assets.
EDGAR
Electronic data gathering analysis and retrieval system.
GAAS
Generally accepted auditing standards.
what are the 3. description of a contra account?
- Attached to another account
- opposite balance of the account it is attached to.
- Reduces the account it is attached to.
Accural accounting
Recognize revenue when earned not when the cash changes hands.
revenue and expenses are temporary accounts to…..
Retained earnings.
what are the 5 financial statements
- Income statement
- Stmt of owner’s equity
- Balance sheet
- cash flows
- notes
what are the heading format for the financial statements excluded balance sheet
Name of company
for year ended 20xx
Financial statement
what is the heading format for the balance sheet?
Name of company
year
balance sheet.
Are assets current AND non-current?
Yes
what is the correct order the current assets are format in?
cash
Investments
AR
merchandise inventory
Pre-paid expenses
supplies
what are non current assets?
PPE
Intangible assets
unearned revenue
when customers pay in advance before the goods are shipped or services are rendered
what are current liabilities
AP
Unearned revenue
what are non- current liabilities?
Bonds payable
loans payable.
what are the qualitative characteristics of accounting information?
Relevant
reliable
comparable
consistent
monetary unit
the national currency of the reporting country.
Economic entity
a business is an economic entity separate & distinct from its owners
period of time
information is reported in a company’s financial statements at least annually.
going concern( continuity)
The company will continue to operate in the future.
revenue recognition
when the entity satisfies a performance obligation, not necessarily when cash changes hands.
matching
the total expenses involved in obtaining the revenue of the period must be computed and related ( matched against) the revenues recorded in the period.
historical costs
the acquisition of goods and services & other resources are entered into the accounting records at their exchange.
full disclosure
circumstances and events that make a difference to financial statement users be disclosed.
Materiality
An item is material if it is likely to influence the decision of a reasonably prudent investor or creditor.
conservatism
accounting measurements take place in a context of significant uncertainties therefore, when alternative accounting valuations are equally possible.
what temporary account is used to close out temporary accounts
Income summary
what account is used to close out income summary
capital
what are the 4 control activities that are used in internal control
- authorization
- recording
- custody safeguarding
- comparison
what are the 5 internal control components?
control activities
risk assessment
information & communication
monitoring
controlled environment.
which reqiures journal entries: Books or bank?
books
petty cash
a way to pay for little expenditures that come up all the time.
