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Definition
| For accounting information, the quality that allows a user to analyze two or more companies and look for similarities and differences. |
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Definition
| The practice of using the least optimistic estimate when two estimates of amounts are about equally likely. |
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Definition
| For accounting information, the quality that allows a user to compare two or more accounting periods for a single company. |
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Term
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Definition
| An asset that is expected to be realized in cash or sold or consumed during the operating cycle or within one year if the cycle is shorter than one year. |
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Term
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Definition
| An obligation that will be satisfied within the next operating cycle or within one year if the cycle is shorter than one year. |
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Term
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Definition
| Current assets divided by current liabilities. |
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Term
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Definition
| Sales less than cost of goods sold |
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Term
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Definition
The gross profit divided by the net sales expressed as a %.
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Term
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Definition
| The ability to turn an asset into cash in the normal course of business operations. |
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Term
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Definition
| The magnitude of accounting information omission or misstatement that will affect the judgement of someone relying on the information. |
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Term
Multiple-step Income Statement
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Definition
| An income statement that shows classifications of revenues and expenses as well as important subtotals. |
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Term
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Definition
| The bottom line of the income statement representing the net profits of the business after considering all revenues and expenses. |
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Term
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Definition
Any revenue or expense not related to the central, on-going activities of the business.
*Example- Interest revenue or interest expense of a merchandising business, income tax expense. |
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Term
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Definition
| The period of time between the purchase of inventory and the collection of any receviable from the sale of the inventory. |
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Term
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Definition
| The expenses incurred in operating the business on a day to day basis related to the central, on-going activities of that business. |
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Term
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Definition
| The income generated from the central, on-going activities of the business; calculated as gross profit less the operating expenses. |
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Term
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Definition
| Net income divided by sales expressed as a %. |
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Term
| Single-step Income Statement |
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Definition
| An income statement in which all expenses are added together and subtracted from all revenues. |
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Term
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Definition
| The ability of a company to pay its debts as they come due. |
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Term
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Definition
| Current assets minus current liabilities. |
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