Term
|
Definition
| A balance sheet that groups together similar assets and similar liabilities, using a number of standard classifications and sections. |
|
|
Term
|
Definition
| Ability to compare the accounting information of different companies because they use the same accounting principles. |
|
|
Term
|
Definition
| Use of the same accounting principles and methods from year to year within a company. |
|
|
Term
|
Definition
| Constraint that weighs the cost that companies will incur to provide the information against the benefit that financial statement users will gain from having the information available. |
|
|
Term
|
Definition
| Assets that companies expect to convert to cash or use up within one year or the operating cycle, whichever is longer. |
|
|
Term
|
Definition
| Obligations that a company expects to pay within the next year or operating cycle, whichever is longer. |
|
|
Term
|
Definition
| A measure of liquidity computed as current assets divided by current liabilities. |
|
|
Term
|
Definition
| A measure of solvency calculated as total liabilities divided by total assets. It measures the percentage of total financing provided by creditors. |
|
|
Term
|
Definition
| A measure of the net income earned on each share of common stock; computed as net income minus preferred dividends divided by the average number of common shares outstanding during the year. |
|
|
Term
| Economic entity assumption |
|
Definition
| An assumption that every economic entity can be separately identified and accounted for. |
|
|
Term
|
Definition
| Assets and liabilities should be reported at fair value (the price received to sell an asset or settle a liability). |
|
|
Term
|
Definition
| Information that is complete, neutral, and free from error. |
|
|
Term
| Financial Accounting Standards Board (FASB) |
|
Definition
| The primary accounting standard-setting body in the United States. |
|
|
Term
|
Definition
| Net cash provided by operating activities after adjusting for capital expenditures and cash dividends paid. |
|
|
Term
| Full disclosure principle |
|
Definition
| Accounting principle that dictates that companies disclose circumstances and events that make a difference to financial statement users. |
|
|
Term
| Generally accepted accounting principles (GAAP) |
|
Definition
| A set of accounting standards that have substantial authoritative support, that guide accounting professionals. |
|
|
Term
|
Definition
| The assumption that the company will continue in operation for the foreseeable future. |
|
|
Term
| Historical cost principle |
|
Definition
| An accounting principle that states that companies should record assets at their cost. |
|
|
Term
|
Definition
| Assets that do not have physical substance. |
|
|
Term
| International Accounting Standards Board (IASB) |
|
Definition
| An accounting standard-setting body that issues standards adopted by many countries outside of the United States. |
|
|
Term
| International Financial Reporting Standards (IFRS) |
|
Definition
| Accounting standards, issued by the IASB, that have been adopted by many countries outside of the United States. |
|
|
Term
|
Definition
| The ability of a company to pay obligations that are expected to become due within the next year or operating cycle. |
|
|
Term
|
Definition
| Measures of the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash. |
|
|
Term
|
Definition
| Generally, (1) investments in stocks and bonds of other corporations that companies hold for more than one year; (2) long-term assets, such as land and buildings, not currently being used in the company's operations; and (3) long-term notes receivable. |
|
|
Term
| Long-term liabilities (long-term debt) |
|
Definition
| Obligations that a company expects to pay after one year. |
|
|
Term
|
Definition
| Whether an item is large enough to likely influence the decision of an investor or creditor. |
|
|
Term
|
Definition
| An assumption that requires that only those things that can be expressed in money are included in the accounting records. |
|
|
Term
|
Definition
| The average time required to purchase inventory, sell it on account, and then collect cash from customers—that is, go from cash to cash. |
|
|
Term
|
Definition
| An assumption that the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared for the business. |
|
|
Term
|
Definition
| Measures of the operating success of a company for a given period of time. |
|
|
Term
| Property, plant, and equipment |
|
Definition
| Assets with relatively long useful lives that are currently used in operating the business. |
|
|
Term
| Public Company Accounting Oversight Board (PCAOB) |
|
Definition
| The group charged with determining auditing standards and reviewing the performance of auditing firms. |
|
|
Term
|
Definition
| An expression of the mathematical relationship between one quantity and another. |
|
|
Term
|
Definition
| A technique that expresses the relationship among selected items of financial statement data. |
|
|
Term
|
Definition
| The quality of information that indicates the information makes a difference in a decision |
|
|
Term
| Securities and Exchange Commission (SEC) |
|
Definition
| The agency of the U.S. government that oversees U.S. financial markets and accounting standard-setting bodies. |
|
|
Term
|
Definition
| The ability of a company to pay interest as it comes due and to repay the balance of debt due at its maturity. |
|
|
Term
|
Definition
| Measures of the ability of the company to survive over a long period of time. |
|
|
Term
| Statement of stockholders' equity |
|
Definition
| A financial statement that presents the causes of changes to stockholders' equity during the period, including those that caused retained earnings to change. |
|
|
Term
|
Definition
| Information that is available to decision-makers before it loses its capacity to influence decisions. |
|
|
Term
|
Definition
| Information presented in a clear and concise fashion so that users can interpret it and comprehend its meaning. |
|
|
Term
|
Definition
| The quality of information that occurs when independent observers, using the same methods, obtain similar results. |
|
|
Term
|
Definition
| The difference between the amounts of current assets and current liabilities. |
|
|
