Term
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Definition
| current assets - current liabilities |
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Term
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Definition
| current assets/current liabilities |
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Term
| Seperate-entity assumption |
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Definition
| activities (transactions) of the business are separate from the activities (transactions) of the owners |
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Term
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Definition
| a business will operate into the future, or is assumed to have an indefinite life |
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Term
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Definition
| the indefinite life of a business must be reported over a series of shorter periods (such as on a yearly basis) |
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Term
| unit of measure assumption |
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Definition
| each business will account for its transactions and report its activities using the currency unit of the firms primary place of business |
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Term
| Accounting information should be... |
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Definition
| Relevant, Reliable, Comparable, Consistant |
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Term
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Definition
| transactions are recorded at the prices prevailing on the date the transaction takes place |
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Term
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Definition
| significant amounts resulting from error or omission can mislead knowledgable readers if they are not properly accounted for and reported |
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Term
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Definition
| benefits of information should outweigh the cost of gathering and reporting |
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Term
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Definition
| in accounting and reporting exercise - don't overstate assets and revenues and don't understate liabilities and expenses |
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Term
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Definition
total assets - total liabilities
(total SE) |
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Term
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Definition
| average total assets/average SE |
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Term
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Definition
| Revenues - expenses + gains - losses |
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Term
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Definition
| net income/main revenue (net sales) |
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Term
| Total asset turnover ratio |
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Definition
| (sales or operation) revenue/average total assets |
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Term
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Definition
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Term
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Definition
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Term
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Definition
| net sales/average accounts receivable |
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Term
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Definition
| cost of goods sold/average inventory |
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Term
| accounts payable turnover |
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Definition
| cost of goods sold/average accounts payable |
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Term
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Definition
| income/average number of shares of common stock outstanding |
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Term
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Definition
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Term
| cash flow from operating activities |
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Definition
| cash flows that are directly related to earning income |
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Term
| cash flows from investing activities |
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Definition
| cash flows related to the acquisition or sale of the company's productive assets |
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Term
| cash flows from financing activities |
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Definition
| cash flows directly related to the financing of the enterprise itself. involves receipt or payment of money to investors and creditors |
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Term
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Definition
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Term
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Definition
| requires that expenses be recorded when incurred (used up) in earning revenues |
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Term
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Definition
| net sales - cost of goods sold |
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Term
| cost of goods sold (equation) |
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Definition
| BI + Purchases = GAFS (- Ending Inventory = COGS) |
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Term
| straight line depreciation |
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Definition
| 1/life * depreciable base (cost - salvage) |
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Term
| Doubling declining depreciation |
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Definition
| net book value * 2 SLR (straight line rate) |
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Term
| units of production depreciation |
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Definition
| (depreciable base/total units produced) * units produced that period |
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Term
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Definition
| amount spent to acquire or improve a long-term asset |
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Term
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Definition
| an amount that is expensed immediately. (anything that doesn't improve or extend the life of the long term asset |
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Term
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Definition
+ Interest earned
+ funds received by bank
- service charges
- NSF checks |
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Term
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Definition
+ deposits in transit
- outstanding checks |
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