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Financial Accounting
IMBM Financial Accounting Notes
22
Accounting
Graduate
11/28/2012

Additional Accounting Flashcards

 


 

Cards

Term
Transaction
Definition
Any event that affects the financial organization and requires recording.
Term
Corporation
Definition
A business organized as a separate legal entity and owned by its stockholders.
Term
Balance Sheet (Statement of Financial Position/Condition) 
Definition
A snapshot of the financial status of an organization at an instance in time. You can think of it as Assets = Equities. Measures financial performance at the end of the month.
Term
Assets
Definition

Economic resources that are expected to benefit future activities.

Also includes: Legal right to future services such as use of facilities.

Term
Equities
Definition

The claims against, or interests in, an organization's assets.

Equities = Liabilities + Owners' Equity

Term
Liabilities
Definition
The entity's economic obligations to nonowners.
Term
Owners' Equity
Definition
The excess of the assets over the liabilities.
Term
Stockholders' Equity
Definition

The owners' equity of a corporation.


Stockholder's Equity = (Paid-In Capital + Retained Earnings)

Term
Paid-in Capital
Definition
The ownership claim arising from funds paid-in by the owners. Start-up money for the company.
Term
Retained Income (Retained Earnings)
Definition
The ownership claims arising from the reinvestment of previous profits.
Term
Accounts Payable
Definition
Amounts owed to vendors for purchases on open accounts.
Term
Accounts Receivable
Definition
Amounts due from customers for sales on open account.
Term
Collections
Definition
The transformation of one asset (A/R) into another (cash).
Term
Revenues
Definition
Increases in ownership claims arising from the delivery of goods or services.
Term
Expenses
Definition
Decreases in ownership claims arising from delivering goods or services or using up assets.
Term
Profits (Earnings, Income)
Definition
The excess of revenues over expenses.
Term
Income Statement
Definition
A statement that summarizes a company's revenues and expenses. It measures the performance of an organization by matching its accomplishments (revenue from customers, which is usually called sales) and the efforts (cost of goods sold and other expenses). Measures financial performance during the month.
Term
Account
Definition
Each item in a financial statement. 
 
Term
Accrual Basis
Definition
A process of accounting that recognizes the impact of transactions on the financial statements in the time periods when revenues and expenses occur instead of when cash is received or disbursed.
Term
Cash Basis
Definition
A process of accounting where revenue and expense recognition would occur when cash received and disbursed.
Term
Cash Collections (Cash Flow)
Definition
Sales - Change in AR
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