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Intro to Financial Accounting
Financial Accounting
17
Accounting
Undergraduate 1
02/26/2008

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Cards

Term
Liabilities
Definition
amounts owed by a company to others
Located: Balance Sheet
Term
Note Payable
Definition
money borrowed to purchase delivery trucks etc
Located: under Liability (Balance sheet)
Term
Common Stock
Definition
represents the residual ownership of a corporate business (Neither dividends/assets)

Located: Under Stockholders' Equity (Balance Sheet)
Term
Current liabilities
Definition
amounts due within one year or less and usually include accounts payable, accruals, loans due to be paid within a year, taxes due within a year, and so on.
Term
Long-term liabilities
Definition
the amounts of mortgages, bonds, and long-term loans that are due more than a year in the future.
Term
Account
Definition
a record of financial transactions; usually refers to a specific category or type, such as travel expense account or purchase account.
Term
Accounts payable
Definition
amounts owed by the company for the goods or services it has purchased from outside suppliers.
Term
Accounts receivable
Definition
amounts owed to the company by its customers.
Term
Accrued expenses, accruals
Definition
an expense which has been incurred but not yet paid for. Salaries are a good example. Employees earn or accrue salaries each hour they work. The salaries continue to accrue until payday when the accrued expense of the salaries is eliminated.
Term
Appreciation
Definition
an increase in value. If a machine cost $1,000 last year and is now worth $1,200, it has appreciated in value by $200. (The opposite of depreciation.)
Term
Assets
Definition
things of value owned by a business. An asset may be a physical property such as a building, or an object such as a stock certificate, or it may be a right, such as the right to use a patented process.
Term
Current Assets
Definition
assets that can be expected to turn into cash within a year or less. Current assets include cash, marketable securities, accounts receivable, and inventory.
Term
Property, Plant, Equipment (PPE)
"Fixed Assets"
Definition
cannot be quickly turned into cash without interfering with business operations. Fixed assets include land, buildings, machinery, equipment, furniture, and long-term investments.
Term
Intangible Assets
Definition
are items such as patents, copyrights, trademarks, licenses, franchises, and other kinds of rights or things of value to a company, which are not physical objects. These assets may be the most important ones a company owns. Often they do not appear on financial reports.
Term
Balance sheet
Definition
a statement of the financial position of a company at a single specific time (often at the close of business on the last day of the month, quarter, or year.) The balance sheet normally lists all assets on the left side or top while liabilities and stockholders' equity are listed on the right side or bottom. A balance sheet balances according to this equation: Assets = Liabilities + Stockholders' Equity.
Term
Cash flow
Definition
the amount of actual cash generated by business operations, which usually differs from profits shown.
Term
Cost of sales, cost of goods sold
Definition
the expense or cost of all items sold during an accounting period. Each unit sold has a cost of sales or cost of the goods sold. In businesses with a great many items flowing through, the cost of sales or cost of goods sold is often computed by this formula: Cost of Sales = Beginning Inventory + Purchases During the Period - Ending Inventory.
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