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Details Title: Intro to Financial Accounting Description: chapter 2 Total Flash Cards: 15 Created: 09/05/2007 19:06:53	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term fiscal year Definition year established for accounting purposes which may differ from a calender year Term interim periods Definition time spans established for accounting pruposes that are less than one year Term revnues (sales) Definition increases in owners' equity arising from increases in assets received in exhange for the delivery of goods or services to customers Term expenses Definition decreases in owners' equity that arise because a company delivers goods or services to customers Term income (profits, earnings) Definition the excess of revenues over expenses Term cost of goods sold Definition original acquisirion costof the inventory that a company sells to customers during the reporting period Term accrual basis Definition accounting method that ecognize the impact of transactions on the financial statements in the time periods when revenues and expenses occur Term accrual basis Definition accounting method that ecognize the impact of transactions on the financial statements in the time periods when revenues and expenses occur Term cash basis Definition accounting method that recognizes the impact of transatcions on the financial satements only when a company receives or pays cash Term recognition Definition a test for determining whether to record revenues in the financial satements of a given period. to be recognized, revenues must be earned and realized Term *entity concept* Definition helps accountants relate events to a clearly defined area of accountability Term reliability* Definition a quality of information that assures decision makers that the information captures the conditions or events it purports to represent Term going concern (continuity) Definition a convention that assumes that ordinarily an entity persists indefinitely Term materiality Definition convention that asserts that an item should be included in a financial satementif its omission or misstatement would tend to mislead the reader of the financial staements under consideration Term cross benefit Definition citerion that states tht an accounting system should be changed when the exoecteds additional benefits of the change exceed its expected addtional costs