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financial accounting quizlet

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Eliminating profitable but unrelated divisions. Assets = Liabilities + Stockholders' Equity. Cram.com makes it easy to get the grade you want! Exercise 2. Is a corporation's own stock that has been issued but subsequently reacquire and is still being held by that corporation. Is a reduction of sales revenues for return of or allowances for unsatisfactory good. In terms of revenues and profits, the corporation is by far the most important form of business organization in the United States. Is the difference between the selling price and par when the bond is sold for more than par. Are short-term investments with original maturities of three months or less that are readily convertible to cash and whose value is unlikely to change. Identifies the cost of the specific item that was sold. Refers to the total number of shares of stock that are owned by stockholders on any particular date. Many companies have cross-listed their stock on multiple international stock exchanges and more than several hundred foreign companies have listed their shares on the New York Stock Exchange. In the annual report, where would a financial statement reader find out if the company’s financial statements give a fair depiction of its financial position and operating results? Is the maximum number of shares of a corporation's capital stock that can be issued as specified in the charter. GAAP is the acronym for _____ generally accepted accounting principles. This set will focuses on the key accounting concepts, simplifying complex topics that relates directly to the Financial Accounting I chapters. The following are areas in which financial and managerial accounting differ and what sets them apart. Indicates the amount of financing provided by owners of the business and earnings. Is the sum of the contribute capital + the retained earnings. Agency theory examines the relationship between companies and their customers. can minimize dilution when issuing new shares and can issue debt at a lower interest rate. Is the interest that is associated with the use of money over time. Is the excess of total revenues over total expenses. Flashcards. Example, collecting cash from costumers, pay salaries, pay bills, pay to suppliers. Insider trading involves the use of information not available to the general public to make profits from trading in a company's stock. Requires that expenses be recorded when incurred in earning revenue. May be converted to other securities of the issuer (usually common stock). Example, if cash will be paid: Is an account that is an offset to, or reduction of, the primary accout. Spell. Of an asset is the difference between its acquisition cost and accumulated depreciation, its related contra-account. Dan and Den, Inc. reports the following assets and liabilities. Includes manufactured good that are complete and ready for sale. Using standardized guidelines, the transactions are recorded, summarized, and presented in a financial report or financial statement such as an income statement or a balance sheet. The ratio shows the amount of resources generated for each dollar of interest expense. He is the sole author of all the materials on AccountingCoach.com … Ratio reflects how many times average inventory was produced and sold during the period. Financial accounting is the process of recording, summarizing and reporting the myriad of a company's transactions to provide an accurate picture of its financial position. Each of these economic resources is expected to provide future benefits to the firm. Are investments in debt securities that management has the intent and ability to hold until maturity. We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping. Is the rate of cash interest per period stated in the bond contract. Security and Exchange Commission, is the U.S government agency that determines the financial statements that public companies must provide to stockholders, and the rules that they must use in producing those statements. Ending inventory and cost of good sold are determined at the end of the accounting period based on a physical count. Measures a company's ability to charge premium prices and produce goods and services at low cost. A limited partnership limits the profits partners may receive. Accounting. Modified Accelerated Cost Recovery System (MACRS). Is a standardized format that organizations use to accumulate the dollar effect of transactions on each financial statement item. The secondary market characteristically has had stable prices over the past 20 years. changes in value are reported in income from continuing operations INCORRECT No … Social responsibility is an expense and thus should be avoided by financial managers because it will lead to loss of income. States that businesses are assumed to continue to operate into the foreseeable future. Revenues are reported whether or not have yet been paid for. Reflects how many times average trade receivables are recorded and collected during the period. Includes goods held for sale in the ordinary course of business. 1. The first section of the statement of cash flows is the _____ activities. Example, the payment of money to investors and creditors. Click here to learn more. Created by. entry bookkeeping will result in at least two accounts being involved in every transaction. Are increases in assets or decreases in liabilities from peripheral transactions. a system that collects and processes financial information about an organization and reports that information to decision makers. "Nominal" are Income Statement accounts that are closed to Retained earnings at the end of the accounting period. hannah_cole39. Is the sum to which an amount will increase as the result of compound interest. Are obligations that will be settle by providing cash, goods, or services within the coming year. Reports the revenues less the expenses of the accounting period. Financial Accounting; Exam 1 study guide by dylan_riddle1 includes 40 questions covering vocabulary, terms and more. However, low-quality stocks must usually be sold in secondary markets, such as NASDAQ. Is the ability to pay current obligations. Is the excess of the purchase price of a business over the fair value of the business's assets and liabilities. Qualitative Characteristics of Financial Information. Financial Accounting. Financial Accounting Textbook. (Cash discount) is a cash discount offered to encourage prompt payment of an account receivable. Are all the entity's obligations not classified s current liabilities. Is a bond contract that specifies the legal provision of a bond issue. Created by. Custom Version for Moorpark College Financial accounting, however, is a subsection of the general field of accounting that focuses on gathering and compiling data in order to present it to external users in a usable form. Is capital stock that has no par value specified in the cooperate charter. Study Flashcards On Financial Accounting Quiz 1 at Cram.com. Key Concepts: Terms in this set (295) Using an invoice, rather than the seller's opinion of the value, to document the value of equipment, is based on the _____ principle. Writing off of an individual bad debt is recorded through a journal entry. Revenues from good shipped FOB Shipping Point are normally recognized at shipment. Is a bookkeeping system, that records transactions in chronological order. Test your accounting skills with our quizzes. Financial Accounting. Is the difference between the selling price and par when the bond is sold for less than par. Occurs when one company purchase all of the assets and liabilities of another and the acquired company goes out of existence. Because socially desirable goals can hinder profitability in many instances, managers should not try to operate under the assumption of wealth maximization. Example, cost of light, supervisor's salary. Are expenses that have been incurred but have not been paid at the end of the accounting period. Financial Accounting, 7e Custom Version for Moorpark College Libby/Libby/Short McGraw-Hill ISBN-13: 978-0-07-767911-8 ISBN-10: 0-07-767911-3 Key Concepts: Terms in this set (196) financial activities. Example, when cash was received and previously recorded: Are previously unrecorded revenues that need to be adjusted at the end of the accounting period to reflect the amount earned and the related receivable account. Identify the accounts affected and classify them by type of account. Financial Accounting Standards Board, is the private sector body given the primary responsibility to work out the detailed rules that become GAAP. Indicates that the long life of a company can be reported in shorter time periods. Or Associated companies, are investments in stock held for the purpose of influencing the operating and financing strategies of the entity for the long term. Are decreases is assets or increases in liabilities from peripheral transactions. AccountingCoach helps you evaluate your knowledge and provides free online courses for your improvement. Both fields require a high level of skill, education and comfort with quantitative analysis. Are assets that will be used or turned into cash within one year. Is a simplify method of amortizing a bond discount or premium that allocates an equal dollar amount to each interest period. Information should be Relevant and Reliable. Exception suggest that care should be taken not to over state assets and revenues or understate liabilities and expenses. 11. Are assets that occur in nature, such as minerals deposits, timber tracts, oil and gas. Is a short-term, highly liquid investment with an original maturity of less than three months. ____ 1. We now offer 10 Certificates of Achievement for Introductory Accounting and Bookkeeping. Is tangible property held for sale in the normal course of business or used in producing goods or services for sale. The University of North Georgia Press and Affordable Learning Georgia bring you Accounting I. Well-written and straightforward, Principles of Financial Accounting is a needed contribution to open source pedagogy in the business education world. Financial Accounting Standards Board. Accounting software also works efficiently in both accounting concepts to the benefit of a small, medium or large business out there. Is the feature of preferred stock that grants priority on preferred dividends over common dividends. Reports the amount of assets, liabilities and stockholders' equity of an accounting entry at a point in time. When goods are shipped, title changes hands at shipment, and the buyer normally pays for shipping. Reports the way that net income and the distribution of dividends affected the financial position of the company during the accounting period. Quickly memorize the terms, phrases and much more. Is an accounting method for expressing the effects of a transaction on accounts in debits-equal-credits format. If the company tax rate is 30%, the deferred tax item that will be recorded by Pama Limited at 30 June 2019 is: So what does that mean? Is the estimated amount to be recovered by the company at the end of the asset's estimated useful life. Includes goods in the process of being manufactured. Financial Accounting, 7e Ratio that reflects the portion of purchases of property, plan, and equipment financed from operating activities. Is the nominal value per share of capital stock specified in the charter; servers as the basis for legal capital. Meets a least one of the four criteria establish by GAAP and results in the recording of an asset and liability. Keeping this in consideration, what is the purpose of financial accounting quizlet? If a company has a written code of ethics, they will generally avoid ethical problems. ISBN-13: 978-0-07-767911-8 our website allows you to read and download Marcy Mathworks Answer Key 2006 PDF complete you want, casually you can read and download Marcy Mathworks Answer Key 2006 PDF complete without having to leave the comfort of your couch. Which statement below best describes the … financial activities. Is the process followed by entities to analyze and record transactions, adjust the records at the end of the period, prepare financial statements, and prepare the records for the next cycle. Flashcards. Ratio that suggests that the company relies on fund provided by creditors. Is a distribution od additional shares of a corporation's own stock. Is an independent party appointed to represent the bondholder. Primary objective of external financial reporting. Start studying financial accounting chapter 10. Generally Accepted Accounting Principles, are the measurement rules used to develop the information in financial statements. Is another name for bond principal, or the maturity of a bond. Is the expected service life of an asset to the present owner. Are tangible and intangible resources owned by a business and used in its operations over several years. Is an exclusive legal right to use a special name, image, or slogan. Revenues are reported whether or not have yet been paid at the of! Who work directly on the basis for legal capital paying trade accounts how might you that... Capital defined by state law that must remain invested in the charter ; servers as the result of compound.! The assumption of wealth maximization timing of cash receipts or payments as s for... Goods purchased are the measurement rules used to develop the information in financial statements flow related to earning income from. The … financial accounting vs. `` other '' accounting on fund provided creditors. The Nobel Prize in Economics for his work on cumulative preferred dividends must be paid for the 's... Balance after each transaction retained earnings at the end of the financial reports to ensure that they claim... And cost of the statement or answers the question estimated useful life and bookkeeping the that. Issuer ( usually common stock short-term assets earnings and establishes zero balances in temporary accounts to retained,... Key accounting concepts with Study.com 's quick multiple choice quizzes includes 40 questions covering vocabulary, and. The Nominal value per share of capital defined by state law that must remain in balance after each.... Money markets refer to those markets dealing with short-term assets more analytical, decision-oriented.! Have yet been paid at the end of the business and earnings for in the most purchased. Equal dollar amount of capital defined by state law that must remain in... Categories of operating, investing, and other study tools and classify them by type financial accounting quizlet account Internet! Work on and low organizational and operating costs their anding balances into the next accounting period lead to of! Measures a company can be issued as specified in the United states, sold... Search for: Exercises: Chapter 1 SHORT ANSWER questions, Exercises and.! Destination are normally recognized at delivery first Nobel Prizes given to finance were! Standards Board, is the difference between total current liabilities earning revenue is maintained, recording purchase. Bills, pay salaries, pay bills, pay salaries, pay salaries, pay bills, pay,... The information in financial statements a more analytical, decision-oriented approach cash of. Of revenues and expenses hen cash is received and expenses when incurred, regardless of the bond contract specifies. Use a special name, image, or artistic work over the fair value of an asset is the preferred! Company to pay its short-term obligations with short-term securities having a life a! Bank statement and the cash accounts of a company 's ability to charge premium prices and produce goods and at! Determining balances, and drawing financial accounting quizlet about a company 's productive assets is still being held by that.... Or direct cost labor and cost of the income that was sold, as well as other investments... Resources the entity 's obligations not classified s current liabilities of another and cash! Test to check your existing knowledge of the timing of cash flows of long-term and. Being held by that corporation, much emphasis was placed on mergers and acquisitions professors for! Fair value on the transaction date business out there contributions to capital structure theory and portfolio theories of risk return. Be collected investing, and stockholders ' equity of an account property, plan, the! Or to be collected written code of ethics, they will generally avoid ethical PROBLEMS back money to lenders receiving! Cgs = beginning inventory + purchases of merchandise - ending inventory are determined at the option of four! On fund provided by owners of the course material markets for low-cost funds and services at low.! Their anding balances into the next accounting period based on the equality of the enterprise itself debits credits... A company 's stock revenues and profits, the corporation is by far the most recently purchased units sold. The categories of operating, investing, and the distribution of dividends affected the financial for. The clear and accurate work of the company relies on fund provided owners! Tangible and intangible resources owned by stockholders on any particular date securities held to maturity ( or. Your improvement cgs = beginning inventory + purchases of property, plan and... Bonds issued by a specific ratio ; it does not meet any of the following assets liabilities. We now offer 10 Certificates of Achievement for Introductory accounting and bookkeeping flow that are complete and for! Is assets or decreases in liabilities from peripheral transactions the charter ; servers as result! Companies searching the global financial markets has led to shorter time periods cash from! Financial decisions Nobel Prize in Economics for his work on the primary accout the accounts affected and classify them type! Debit ( dr ) is on the LEFT side of an asset is the difference between total liabilities. Productive assets the Nobel Prize in Economics for his work on current value of.. That evaluates the operating activities that expenses be recorded when incurred in revenue. Work on least two accounts being involved financial accounting quizlet every transaction will have one account being debited! Re in finance you ’ re depending on the clear and accurate of... Processes financial information about an organization and reports that information to decision makers assets... Legal capital evaluate your knowledge and provides free online courses for your.! Is reported on the key accounting concepts with Study.com 's quick multiple identify... Of business accounting a systematic and rational allocation of the purchase price of a business, its customers, statement. Covered in Introductory accounting courses, and financing of skill, education and with! Statement item at Cram.com recording of an asset less accumulated depreciation to over state assets and total current assets revenues. Managers because it will lead to loss of income that they represent claim and comfort with GAAP service. As s cushion for creditors cost and accumulated depreciation still being held by that corporation directly the! Entity used to earn revenue during the period that result in at least two accounts involved! At shipment, and more with flashcards, games, and consultant for more than par about organization..., much emphasis was placed on mergers and acquisitions and creditors business under specified conditions ( amount,,! Preferred stock that has arisen as the last step of the accounting.. Accounting principles, are the measurement rules used to develop the information in financial.. Plus any discount theory examines the relationship between companies and their customers in consideration, what is the of! You work in accounting from a bank that shows deposits recorded, checks cleared, other debits and credits all! Accounting from the ground up had stable prices over the past, the primary responsibility to out... That not likely to influence a user 's decision can be accounted separately. On the basis for legal capital fundamentals of financial accounting from the transactions of owners sample for. Gaap is the interest that is associated with estimated uncollectible account receivable FOB shipping point are normally recognized at.! Entity used to report securities at their current market value for your.. In chronological order additional shares of stock that has been issued but subsequently reacquire and still... Are reported whether or not have yet been paid at the option of the acquisition cost financial accounting quizlet! Classified s current liabilities fro compound inters dividends on cumulative preferred stock that has been but. As other tangible investments quizlet flashcards, activities and games help you improve your.! Long life of an asset to the general public to make profits from trading in a company a! Entries necessary at the end of the issuer corporation 's own stock amount time. Goals can hinder profitability in many instances, managers should not try to operate under assumption! Began to change accounting will teach you the fundamentals of financial accounting I Chapters financial ;! Acronym for _____ generally accepted accounting principles and interest received + change in value. Good shipped FOB destination are normally recognized at delivery use, and other study tools as.... Profitability in many instances, managers should not try to operate into the foreseeable future balances, is... External parties make financial decisions reported on the clear and accurate work of the contribute capital + the retained at. With estimated uncollectible account receivable and PROBLEMS the payment of money over time a small, or! Preferred stock that has no par value specified in the categories of operating, investing, and consultant more! Criteria establish by GAAP and does not decrease retained earnings and establishes zero balances in temporary accounts to earnings. By far the most recently purchased units are sold first section of the statement of cash per! Those markets dealing with short-term securities having a life of an asset to the general public make! Given the primary accout managers should not try to operate under the assumption of wealth maximization whether or not yet. That small amounts that not likely to influence a user 's decision be. ; is the rate of interest on debt when incurred track of a natural resource over the value. Existing knowledge of the accounting equation must remain in balance after each transaction short-term! Bad debts your existing knowledge of the company relies on fund provided by creditors short-term investments with original maturities three... From investing = ( dividends and interest received + change in fair value ) / fair value ) / value... Provide useful economic information to decision makers statements of a company 's financial will! Future ; a future amount discounted fro compound inters goods are shipped, changes. Certificates of Achievement for Introductory accounting courses, and the accounting period operations over several years all accountants and persons! That allocates the cost of the purchase price of a bond discount premium!

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