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Chapter 1
N/A
28
Accounting
Undergraduate 2
01/26/2015

Additional Accounting Flashcards

 


 

Cards

Term
Financing Activities
Definition
Issuing stock, paying dividends, borrowing money
Term
Investing Activities
Definition
Buying the big ticket items needed to run a business, lending and other investing
Term
Operating Activities
Definition
Everything that will run through the income statement, paying for supplies, interest income and interest expense
Term
Equity
Definition
Consists of owner investments by shareholders
Term
Recognizing Revenue
Definition
Recognize revenue when it is earned, even if you have not been paid
Term
Dividends
Definition
Not an expense of the business, they are a reduction of retained earnings
Term
Return on Assts
Definition
Net income/ average total assets
Term
Asset Exchange
Definition
Increase one asset, decrease another
Term
Asset Use
Definition
Decrease assets by decreasing claims
Term
Asset Source
Definition
Increase assets by increasing claims
Term
D.E.A.D.
Definition
Debits increase expenses, assets, and dividends
Term
Debt Ratio
Definition
total liabilities/total assets: evaluates the level of debt risk, a higher ratio indicates that there is a greater probability that a company will NOT be able to pay it's bills in the future
Term
Income
Definition
Revenues-expenses
Term
Assets
Definition
liabilities + owner's equity
Term
Claims Exchange
Definition
increase one claim, decrease another
Term
Investment by Owners
Definition
- cash(asset): increase
- common stock(equity): increase
- FA, asset source transaction
Term
Purchase Supplies
Definition
- cash(asset): decrease
- supplies(asset): increase
- OA, asset exchange
Term
Purchase Equipment
Definition
- cash(asset): decrease
- equipment(asset): increase
- IA, asset exchange
Term
Purchase Supplies on Credit
Definition
- supplies(asset): increase
- accounts payable: increase
- OA, asset source
Term
Provide Services for Cash
Definition
- cash(asset): increase
- revenues(NI): increase
- retained earnings: increase
- OA, asset use
Term
Payment of Expenses
Definition
- cash(asset): decrease
- expenses(equity): increase
- retained earnings: increase
- OA, asset use
Term
Payment of Dividend
Definition
- cash(asset): decrease
- retained earnings(equity): decrease
- FA, asset use
*no reduction in net income, only RE*
Term
Core Financial Reports
Definition
1. Income Statement
2. Statement of Retained Earnings
3. Balance Sheet
4. Statement of Cash Flows
Term
Income Statement
Definition
- revenue, expenses, and net income
- summarizes the revenues, expenses, and results of operations for a specified period of time
- differences b/w the revenues and expenses is identified as net income or net loss
Term
Statement of Retained Earnings
Definition
- discloses changes in retained earnings during a designated period of time
- Statement of Owners' Equity:common stock, retained earnings, dividends, and owners' equity
Term
Balance Sheet
Definition
- states the economic resources owned by a company and the claims against those resources
- prepared as a specific date
Term
Statement of Cash Flows
Definition
- reveals how cash is generated and expended during a specific time period
Term
Returns on Assets(ROA)
Definition
net income/average total assets
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