Mod 2 Business Flashcards
Accounting
The process of collecting, analyzing, and reporting financial information
Managerial Accounting
Provides information for managers within an organization to make decisions about a company’s financing, investing, marketing, and operating activities
Financial Accounting
Provides information for people outside an organization through the generation of standardizing financial statements
Generally Accepted Accounting Principle (GAAP)
The financial accounting rules, standards, and usual practices followed by accountants in Canada when preparing financial statements until Jan 2011
International Financial Reporting Standards (IFRS)
A set of globally accepted accounting standards adopted in Canada on Jan 1 2011 for public companies and those private companies that chose of adopt them
Accounting Standards for Private Enterprises (ASPE)
Accounting standards similar to the former Canadian GAPP for provide privates companies (Unless the private companies choose to use IFRS)
Balance Sheet (or Statement of Financial Position)
A financial statement that provides a snapshot of a company’s financial position by stating assets, liabilities, and owner’s equity
Income Statement (or statement of income)
A financial statement that provides a summary of how much a company earned over a period of time; summarizes revenue, expenses, and net income (or loss)
Statement of Cash Flows (or Cash Flow Statement)
A financial statement that illustrates how the company’s operating, investing, and financing activities affect cash over a period of time
Cost Of Goods Sold (COGS)
The cost of producing or purchasing products for sale; typically varies directly with sales volume or production volume
Operating Expense
Ongoing business expenses such as rent, salaries, utilities, and marketing expenses’ these often do not change in direct relation to changes in sales volume
Financial Ratio
A number that shows the relationship between 2 elements of a company’s financial statements; allows for a fairer comparison between current financial results and results form previous periods or industry
Return On Sales
A financial ratio that measures profitability by dividing net income by revenue
Current Ratio
A financial ratio that measures liquidity by dividing current assets by current liabilities
Debt-To-Equity Ratio
A financial ratio that measures leverage by dividing total liabilities by owners’ equity
Barter
A system of exchange in which goods or services are traded directly for other goods and services
Money
Anything a society uses to purchase products or resouces
Currency
Bank notes and coins used as a medium of exchange
Demand Deposits
Money stored in chequing accounts that depositors can withdraw on demand
Time Deposits
Money invested for a specific time
M1
A measure of money supply that essential consists of currency and chequing accounts
M2
A measure of money supply that consists of M1 plus saving accounts and some other types of time-based deposit accounts
M3
A measure of money that includes M2 plus Canadian residents’ foreign currency deposits and non-personal deposit
Term Deposits
Deposits at a bank or other financial institution that pay interests but cannot be withdrawn on demand
