Term
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Definition
| business documents that companies use to report the results of their activities to various user groups. |
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Term
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Definition
| an information system that measures business activities, processes data into reports, and communicates results to decision makers. |
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Term
| Who Uses Accounting Info? |
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Definition
- Individuals
- Investors/creditors
- Regulatory Bodies
- Nonprofit Organizations
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Term
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Definition
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Term
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Definition
| Provides info for decision makers outside the entity |
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Term
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Definition
| Provides info for managers (inc. budgets and forecasts) |
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Term
| Different Types of Businesses |
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Definition
- Propreitorship
- Partnership
- Limited Liability Company (LLC)
- Corporation
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Term
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Definition
| single owner; liable for debts |
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Term
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Definition
| two or more owners; each pays alloted tax; have mutual agency and unlimited liability |
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Term
| limited liability partnership |
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Definition
| partner cannot create liabilities for other partners; one partner must have unlimited liability. |
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| Limited Liability Company (LLC) |
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Definition
| business as opposed to owners is liable for debts; owner(s) called members; each memeber pays income tax (no business tax); all have limited liability |
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Term
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Definition
| business owned by stock or share holders; stockholders have limited liability; dividends are taxed twice |
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Term
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Definition
| Organization stands apart as a separate economic unit |
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| Continuity (Going-Concern) Assumption |
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Definition
| Entity will operate long enough to use existing assets |
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| Historical Cost Principle |
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Definition
| assets should be recorded at actual cost paid as opposed to how much it is currently worth |
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Term
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Definition
| How much assets is worth now. |
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Term
| Stable Monetary Unit Assumption |
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Definition
| Dollar's purchasing power is stable over time (no adjustment for inflation). |
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Term
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Definition
| Assets=Liabilities + Stockholders' Equity |
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Term
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Definition
| economic resources that are expected to produce a benefit in the future |
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Term
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Definition
| "outsider claims"; debts payable to outsiders called creditors |
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Term
| Owner's (Stockholder's) Equity |
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Definition
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Term
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Definition
- cash/cash equivalents
- merchandise inventory
- property, plant, and equipment (PP&E) or fixed assets
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Term
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Definition
- account payable
- note payable
- long-term debt
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Term
| Parts of Stockholders' Equity |
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Definition
- paid-in capital
- retained earnings (within inc revenues, expenses,and dividends)
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Term
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Definition
| amount stockholders have invested in the corporation; most basic component is common stock |
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Term
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Definition
| corporation issues to stockholders as a proof of ownership |
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Term
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Definition
| amount earned by income producing activities and kept for use in business |
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Term
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Definition
| inflows of resources that increase retained earnings by delivering goods or services to customers |
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Term
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Definition
| resources outflows that decrease earnings due to operations |
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Term
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Definition
decrease retained earnings because they are distributions to stockholders of assets (usually cash) generated by net income
NEVER AFFECT NET INCOME; THEY ARE NOT EXPENSES BUT RATHER DIRECT REDUCTIONS OF RETAINED EARNINGS |
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Term
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Definition
| excess of revenues over expenses |
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| Net Income/Net Profit/Net Earnings |
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Definition
| total revenues> total expenses |
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Definition
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| income statement/statement of operations |
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Definition
| reports revenues and expenses for the period |
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Term
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Definition
| 52 or 53 weeks ending on the closest day to January 31 |
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Definition
| refers to an amount after a subtraction |
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Term
| statement of retained earnings |
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Definition
| net income or net loss flows from income statement to statement of retained earnings |
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Term
| balance sheet/statement of financial position |
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Definition
| reports assets, liabilities, and stockholders equity |
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