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intermediate acct chptrs 4-5
N/A
25
Accounting
Undergraduate 3
09/22/2008

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Cards

Term
earnings management
Definition
the planned timing of revenues, expenses, gains, and losses to smooth out bumps in earnings
Term
single step income statement
Definition
consists of just two groupings: revenues and expenses (expenses deducted from revenues to arrive at net income)
Term
sales/revenues, CGS, Selling expenses, Admin and general expenses
Definition
operating section of the income statement includes:
Term
other revenues and gains, other expenses and losses
Definition
nonoperating section of the income statement includes:
Term
operating section, nonoperating section, income tax, discontinued operations, extraordinary items, earnings per share
Definition
sections of the income statement
Term
(1) discontinued operations (2) extraordinary items (3) unusual gains/losses (4) changes in accouting principles (5)changes in estimates (6) correction of errors
Definition
six general categories of irregular items
Term
discontinued operation (one of the most common types of irregular items)
Definition
when a company eliminates the relults of operations and cash flows of a component from its ongoing operations, and there is no significant continuing involvement in that component after the disposal transaction
Term
extraordinary items
Definition
nonrecurring material items that differ significantly from a company's typical business activities. (unusual in nature and infrequent in occurrence.
Term
unusual gains and losses
Definition
items that are unusual or infrequent but not both
Term
retrospective adjustment
Definition
when a company recognizes a change in accounting principle by making changes to the financial statements.
Term
intraperiod tax allocation
Definition
the process of allocating income tax costs to periods.."let the tax follow the income"
Term
net income-preferred dividends/weighted average of common shares outstanding
Definition
EPS formula
Term
appropriated retained earnings
Definition
r/e restricted to comply with contractual requirements, board of director's policy, or current necessity
Term
solvency
Definition
the ability of a company to pay its debts as they mature
Term
(1) historical cost (2) judgements and estimates (3) omits many items of financial value like customer base, and reputaion
Definition
limitations of the balance sheet
Term
current assets, long term assets, PPE, intangibles, other assets
Definition
classifications of assets
Term
current liabilities, long term debt, owners equity (capital stock, paid in capital, R/E)
Definition
classifications of liabilities and stockholder's equity
Term
current assets
Definition
cash and other assets a company expects to convert into cash, sell, or consume either in one year or in the operating cycle, whichever is longer
Term
(1) useful in making investment, credit, and similar decisions
(2) useful in assessing the amounts, timing and uncertainty of future cash flows
(3)learn about enterprise resources, the claims to them and the changes in them
Definition
objectives of financial reporting
Term
International financial reporting standards
Definition
IFRS
Term
it enhances comparability between companies financial statements, and gives investors more confidence in what they are reading. also it provides a framework for solving new and emerging problems and questions
Definition
why do we need a conceptual framework?
Term
1.useful in investment and credit decisions
2.useful in assessing cash flow prospects
3.about enterprise resources, claims to those resources, and changes in them.
Definition
What are the primary objectives of financial reporting
Term
(1) materiality (2) cost benefit relationship (3) conservatism (4) industry practices
Definition
four primary constraints
Term
(1) revenue recognition (2) matching (3) historical cost (4) full disclosure
Definition
four primary principles
Term
(1) economic entity (2) going concern (3) periodicity (4) monetary unit
Definition
four primary assumptions
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