Balance Sheet

tells what obligations will be due in near future and what assets will be available to satisfy them

Income Statement

tells revenue/expenses for period of time

Statement of Cash Flows

tells where cas comes from and how it was used during the period

Notes

provide essential detailsabout the company's accounting policies/other key factors that affect financial condition and performance

Understandability

the quality of accounting information that makes it comprehensible to those willing to spend the necessary time

Relevance

the capacity of information to make a difference in a decision

Faithful Representation

the quality of information that makes it complete, neutral, and free from error

Comparability

for accounting information, the quality that allows a user to analyze two or more companies and look for similarties and differences

Depreciation

the process of allocating the cost of a long-term tangible asset over its useful life

Consistency

for accounting information, the quality that allows a user to compare two or more accounting periods for a single company

Materality

the magnitude of an accounting information omission or misstatement that will affect the judgement of someone relying on the information

Conservatism

the practice of using the least optimistic estimate when to estimates of amouns are about equally likely

Operating Cycle

the period of time between the purchase of inventory and the collection of any receivable from the sale of the inventory 

Current Asset

an asset that is expected to be realized in cash or sold orconsumed during the operating cycle of within one year if the cycle is shorter than one year

Current Liability

an obligation that will be satisfied within the next operating cycle or within one year if the cycle is shorter than one year

Working Capital

current assets minus current liabilities

Single Step Income Statement

an income statement in which all expenses are added together and subtracted from all revenues

Sales (Revenue) - Expenses = Net Income

Multiple Step Income Statement

an income statement that shows classifications of revenues and expenses as well as important subtotals

Sales - Expenses - Other Expenses/Revenue + Tax = Net Income

Gross Profit

sales less cost of goods sold

Profit Margin

net income divided by sales

Auditor's Report

the opinion rendered by a public accounting firm concerning the fairness of the presentation of the financial statements

an income statement in which all expenses are added together an subtracted from all revenues

single step income statement

the magnitude of am omission or a misstatement in accounting information that will affect the judgement of someone relying on the information

materiality

the capacity of information to make a difference in a decision

relevance

an income statement that provides the reader with classifications of revenues and expenses as well as with important subtotals

multistep income statement

the practice of using the least optimistic estimate when two estimates of amounts are about equally likely

conservatism

the quality of accounting information that makes it comprehensible to those willing to spend the necessary time

understandibility

current assets divided by current liabilities

current ratio

the quality of accounting information that makes it complete, neutral, and free from error

faithful representation

an obligation that will be satisfied within the next operating cycle or within one year if the cycle is shorter than one year

current liability

current assets minus current liabilities

working capital

net income divided by sales

profit margin

the quality of accounting information that allows a user to analyze two or more companies and look for similiarites and differences

comparability