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| Reports created from accounting records that summarize a firm’s performance in money terms. |
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| The accounting entry allocating the cost of a long-lived asset against income over the asset’s life. It is a noncash charge, so net income is generally less than true cash flow by at least the amount of ____________. |
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| A taxpayer’s total tax bill divided by taxable income. A composite of the various bracket rates to which the taxpayer’s income is subject. |
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| Items of expenditure that the tax code allows taxpayers to deduct from income to arrive at taxable income. |
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| Earnings Before Interest and Taxes (EBIT) |
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| A measure of a firm’s performance without regard to how it is financed. Also known as operating Profit. |
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| An ownership interest. In business, the portion of a firm’s capital representing funds belonging to its shareholders. |
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| A measure of a firm’s performance without regard to how it is financed. |
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| Exemptions (Personal and Dependency) |
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| In personal taxes, an amount by which taxable income can be reduced for each person in a household. |
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| An item of expenditure not closely related to production. Contrast with cost. |
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| With respect to a company, the ability to pay its bills in the short run. With respect to an asset, the readiness with which it can be converted to cash. |
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| Liquid investments that are held instead of cash. |
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| _______ _______ are expected to become cash in less than one year. They largely include cash, receivables, and inventories. |
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| According to which Principle, recognition of an asset's cost should match its service life? |
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| Any method that shifts depreciation forward in an asset’s life. This method increases early charges and reduces those that come later, keeping total depreciation constant. |
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| Credit granted in the normal course of business between companies. That is, vendors don’t usually demand immediate payment for their products. |
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| The conditions under which a sale is made primarily with respect to payment. Terms include a date on which payment is due and often specify a prompt payment discount that may be taken if payment is made within a specified time. |
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| Paying invoices after they’re due according to the terms of sale. Also called leaning on the Trade. |
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| Revenue less cost where cost is spending closely associated with production. Stated in dollars or as a percentage of revenue. A fundamental measure of a business’s Strength. |
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| Obligations expected to require cash in less than one year, usually payables and accruals. |
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| The rate at which the next dollar of income will be taxed. Generally the taxpayer’s bracket Rate. |
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| A bond issued by a government unit below the federal level. The interest on __________ ________ is exempt from federal income tax. |
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| The thing that is taxed. Generally income, wealth, or Consumption. |
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| An income tax structure in which higher incomes are taxed at higher rates. |
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| A range of income in which the tax rate is constant. |
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| A relatively informal, nonbinding agreement with a bank as to the maximum amount a firm can borrow during a period of time. |
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| The difference between the sale and purchase prices of an asset held over a period of time. |
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| total non-exempt income less deductions and exemptions. |
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Definition
| The stated or face value of certain securities, generally bonds and preferred stocks. A bond pays interest on its ___ _______, which is Usually $1,000. |
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| Tax Loss Carry Back (Forward) |
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Definition
| The allocation of losses in a year to previous or subsequent years for the purpose of calculating taxes in those years. Losses may be carried back 2 years and carried forward 20 years. |
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| Total Effective Tax Rate (TETR) |
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Definition
| The combined income tax rate including federal and state tax. Less than the sum of the two because state tax is deductible from federal tax. |
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Term
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Definition
| The balance sheet accounts associated with day-to-day operating activities |
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