Term
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Definition
| the recording, measurement, and interpretation of financial information |
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Term
| Certified Public Accountant |
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Definition
| an individual who has been certified by the state in which he or she practices to provide accounting services ranging from the preparation of financial records and the filing of a tax returns to complex audits of corporate financial records |
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Definition
| accountants employed by large corporations, government agencies, and other organizations to prepare and analyze their financial statements |
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Term
| Certified Management Accountants (CMAs) |
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Definition
| private accountants who, after rigorous examination, are certified by the National Association of Accountants and who have some managerial responsibility |
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Term
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Definition
-limited to the routine, day-to-day recording of business transactions. -Responsible for obtaining and recording the information that accountants require to analyze a firm's position.
-less training than accountants |
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| Accountants (vs Bookkeepers) |
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Definition
| record financial information, but to understand and interpret and develop sophisticated accounting systems necessart to classify and analyze financial information |
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Term
| Purpose of internal financial information |
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Definition
1) to aid in internal planning and control
2) for external purposed such as reporting to the Internal Revenue Service, stockholders, creditors, customers, employees, and other parties |
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Term
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Definition
| refers to the internal use of accounting statements by managers in planning and directing the organization's activities |
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Term
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Definition
| the movement of money through an organization over a daily, weekly, monthly, or yearly basis |
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Definition
| an internal financial plan that forecasts expenses and income over a set period of time |
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Term
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Definition
Budget for entire firm
TOP DOWN: begin at the upper management level and filter down to the individual department level
BOTTOM UP: start at the department or project level; and are combined at the CEO' office |
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Term
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Definition
a summary of a firm's financial information, products, and growth plans
-Most important thing is the signature of a CPA attesting that the required financial statements are an accurate reflection of the underlying financial conditions of the firm |
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Term
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Definition
| a firm's economic resources or items of value that it owns. cash, inventory, land, equipment, buildings, and other tangible and intangible things |
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Term
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Definition
| debts the firm owes to others |
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Term
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Definition
| contains all of the money that has ever been contributed to the company that never has to be paid back |
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Term
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Definition
| Assets = Liabilities + owner's equity |
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Term
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Definition
a system of recording and classifying business transactions in separate accounts in order to maintain the balance of accounting equation
Assets = Liabilities + Owner's Equity |
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Term
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Definition
the four-step procedure of an accounting system:
1)Examining source documents
2)recording transactions in and accounting journal
3)posting recorded transactions
4)preparing financial statements |
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Term
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Definition
| balance sheet, income statement, (cash flow) |
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Term
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Definition
| Generally Accepted Accounting Principles |
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Term
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Definition
a financial report that shows an organization's profitability over a period of time
-clearest possible pictures of the company's overall revenues and costs incurred in generating those revenues |
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Term
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Definition
| the total amount of money recieved (or promised) from the sale of goods or services |
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Term
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Definition
the amount of money the firm spent (or promised to spend) to buy and/or produce the products it sold during the accounting period
Costs of goods sold = Beginning inventory + interim purchases - ending inventory |
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Term
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Definition
| revenues minus the cost of goods sold required to generate revenues |
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Term
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Definition
the costs incurred in the day to day operations of an organization
Common expense accounts on income statements:
1)selling, general, and administrative expenses
2)research, developmentm and engineering expenses
3) interest expenses |
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Term
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Definition
| the process of spreading the costs of long lived assets such as buildings and equipment over the total number of accounting periods in which they are expected to be used |
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Term
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Definition
| the total profit (or loss) after all expenses, including taxes, have been deducted from revenue; also called net earnings |
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Term
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Definition
at the end of each accounting period, the dollar amounts in all the revenue and expense accounts are moved into an account called "retained earnings", one of the owners equity accounts.
-Revenues increase owners equity, expenses decrease it |
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Term
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Definition
a "snapshot" of an organization's financial position at a given movement.
-Assets MUST equal liabilities plus owner's equity
-an accumulation of all financial transactions conducted by an organization since its founding |
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Term
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Definition
-All asset accounts are listed in descending order of liquidity
-Called short-term assets are those that are used or converted into cash within the course of a calendar year |
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Term
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Definition
| refers to money owed the company by its clients or customers who have promised to pay for the products at a later date |
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Definition
Fixed assets, commitment of organizational funds of at least one year
-long term investments, plant and equipment, and intangible assets |
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Term
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Definition
| a firm's financial obligations to short term creditors which must be repaid with a year |
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Term
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Definition
| the amount a company owes to suppliers for goods and services purchased with credit |
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Term
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Definition
| is an account representing all unpaid financial obligations incurred by the organization |
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Definition
calculations that measure an organization's financial health
-brings the complex information from the income statement and the balance sheet into sharper focus |
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Term
| Relation between income statement and balance sheet |
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Definition
1) how much did the firm make or lose?
2) how much is the firm presently worth based on historical values found on the balance sheet? |
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Term
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Definition
| measure how much operating income or net income an organization is able to generate relative to its assets, owner's equity and sales |
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Term
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Definition
(type of profitability ratio)
Computed by dividing net income by sales, shows the overall percentage profits earned by the company |
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Term
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Definition
(type of profitability ratio)
net income divided by assets, shows how much income the firm produces for every dollar invested in assets.
-the return on assets calculation requires data from both the balance sheet and income statement |
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Term
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Definition
(profitability ratio)
-also called return on investment ROI
-net income divided by owners' equity --> shows how much income is generated by each $1 the owner's invested in the firm |
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Term
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Definition
| measure how well a firm uses its assets to generate each $1 sales |
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Term
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Definition
(asset utilization ratio)
-sales divided by accounts receivable, indicates how quickly a firm is able to collect payments on its credit sales |
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Term
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Definition
(asset utilization ratio)
- sales divided by total inventory, indicates how many times a firm sells and replaces its inventory over the course of a year |
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Term
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Definition
(asset utilization ratio)
-sales divided by total assets, measures how well an organization uses all of its assets in creating sales |
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Term
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Definition
| Compare current (short term) assets to current liabilities to indicate the speed with which a company can turn its assets into cash to meet debts as they fall due |
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Definition
(liquidity ratio)
calculated by dividing current assets by current liabilities |
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Term
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Definition
(liquidity ratio)
calculated by dividing current assets by current liabilities |
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Term
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Definition
(liquidity ratio)
also called acid test
-no inventory, the least liquid current asset
-measures how well an organization can meet its current obligations without resorting to the sale of inventory |
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Term
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Definition
| provide information about how much debt an organization is using relative to other sources of capital, such as owner's equity |
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Term
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Definition
| provide information about how much debt an organization is using relative to other sources of capital, such as owner's equity |
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Term
| Debt to total assets ratio |
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Definition
(debt utilization ratio)
-indicates how much of the firm is financed by debt and how much by owners' equity |
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Term
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Definition
Product
Price
Promotion
Place |
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Term
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Definition
1920s-50s: pushing products
current: indentifying consumer needs
solving problems |
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Term
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Definition
dividing the total potential market into groups with similar characteristics/needs
demographic
psychographic
geographic
behavioristic |
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Term
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Definition
| a specific group of consumers whose wants/needs the company focuses its efforts on |
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Term
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Definition
| a good, service or idea containing tangible and intangible attitudes that provide satisfaction and benefits |
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Term
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Definition
product and service
and
value enhancers i.e. warranty |
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Term
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Definition
| all products offered by company |
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Term
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Definition
| related group of items by company |
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Term
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Definition
| purchased frequently with little effort |
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Term
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Definition
| purchased less frequently, and with some research/effort |
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Term
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Definition
| products with unique characteristics |
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Term
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Definition
| using symbols to characterize products and distinguish from one another |
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Term
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Definition
introduction
growth
maturation
decline |
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Term
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Definition
| costs/expenses that remain the same regardless of number of product/units made (i.e. rent) |
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Term
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Definition
costs that change depending on the number of units produced (i.e. materials)
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Term
| Break-Even Analysis Pricing |
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Definition
Total Fixed Costs
QTY (units) = __________________
Price - Variable Costs
Tells the business how many units they
have to sell at a certain price/unit to cover
all costs |
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Term
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Definition
| go into market with really high price, give perceived value (iphone), cover costs with high price, may sell less and capture less audience |
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Term
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Definition
| want to make a lot of sales, volume, capture large portion of market, relatively low price but sell as much as possible, hard to raise price after starting low |
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Term
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Definition
9.99 seems much less than 10, really isn't
or
charge high price for perceived quality/prestige |
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Term
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Definition
Distribution includes all the activities necessary to move products from producers to customers.
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Term
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Definition
The distribution channel is the path that a product or service follows from the producer to the end user.
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Term
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Definition
Making then selling directly to consumer = direct
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Term
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Definition
Making then selling to distribute = indirect
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Term
Time Utility
(value of intermediaries) |
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Definition
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store can assemble for you, saves time
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Term
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Definition
| don’t need to have retail outlet, gives product place to be sold |
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Term
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Definition
| if bought at store, could get the product fitted, serviced without sending to manufacturer |
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Term
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Definition
| stores can customize/personalize products |
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Term
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Definition
| can give more in-depth information when customer needs it |
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Term
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Definition
stores can transfer ownership to consumer
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Term
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Definition
| Long term partnerships among channel members to reduce costs, waste and unnecessary movement through channel to satisfy customers |
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Term
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Definition
51% of total advertising expenditures
A measurable response
Order
Lead Generation
Traffic
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Term
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Definition
| company motivate middlemen to push product down to consumer ex pharmacy |
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Term
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Definition
create demand by consumers to pull product through middlemen and company ex ads on TV for prescriptions (ask your doctor)
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