Financial Accounting

Frage	Antworten
Accounting	Process of identifying, recording, and summarizing economic information and reporting it to decision makers
Accounting System	Process an organization uses to record financial data and make financial statements
Annual Report	Prepared by management Shows organizations past performance and future prospects
Form 10K	Filed annually with the SEC
Balance Sheet	Shows the financial status of an organization at a moment in time
Assets	Resources
Liabilities	Obligations
Note Payable	Shows evidence of a debt and describes payment terms
Owner's Equity	Owner's claim on an organization's assets Also called "Net Assets"
Net Assets	Assets-liabilities
Long-Lived Asset	An asset expected to last one year or longer
Account	Summary Record
Inventory	Goods help by organization meant for sale to customers
Open Account	Buying/Selling on credit
Account Payable	A liability from an open account transaction
Compound Entry	Transaction that affects 2+ accounts
Creditor	Entity to whom an organization owes money
Sole Proprietership	Business with a single owner
Partnership	2+ individuals as co-owners
Corporation	Business organization created by individual state laws
LLC	Limited Liability Corporation Creditors generally have claims against corporate assets only Corporations are automatically limited in liability
Privately Owned	Shares are not sold publicly Also called "closely held" or "unlisted"
Stock Certificate	Formal evidence of ownership Also lists par value
Stockholders' Equity	Owners' Equity in a Corporation
Paid-In Capital	Total owner capital investment in a corporation
Paid-In Capital in Excess of Par Value	a=average price/share b=par value/share c=# shares issued ac=bc+c(a-b)
Common Stockholders	Owners with residual claims against the organization's assets
Board of Directors	Elected by stockholders to represent them
GAAP	Generally Accepted Accounting Principles
US GAAP Oversight	Congress \/ SEC \/ FASB
FASB	Financial Accounting Standards Board Independent body that establishes US GAAP
IFRS	International Financial Reporting Standards Established by IASB
IASB	International Accounting Standards Board
Auditor	Assesses credibility of financial data
Public Accountants	Offer services to the public for a fee
CPA	Certified Public Accountant Must meet standards set by state Board of Accountancy
Who can issue official opinions on financial statements?	CPAs
AICPA	American Institute of Certified Public Accountants CPA Professional Organization
IAASB	International Auditing and Assurance Standards Board Goal of standardizing audit regulations globally
PCAOB	Public Company Accounting Oversight Board
Sarbanes-Oxley Act	2002 Established PCAOB Prohibited public accounting firms from providing certain non-audit services to audit clients Every 5 years, lead partner and reviewing partner on an audit must switch
GAAS	Generally Accepted Auditing Standards Minimum steps for an auditor to take to have a good shot @ finding errors and omissions
GASB	Government Agency Standards Board
Operating Cycle	Time between acquiring goods/services in cash and sale of products for cash
Fiscal Year	Year established for accounting purposes
Revenue	Increase in net assets from a sale. Increases owner equity.
Expense	Cost of providing goods or services - decreases owner equity
Income	Revenue - Expenses
Retained Income	Total cumulative owners' equity generated by profits
Accounts Receivable	Amounts owed to company by customers in exchange for goods and services
Cost of Goods Sold	Original acquisition cost of inventory sold to customers in a reporting period
Accrual Accounting	Record transaction as it occurs
Cash Accounting	Record transaction when cash is received
Matching	Recording expenses in the same time period that we recognize the related revenues
Product Costs	Costs linked to revenue
Period Costs	Linked to the passage of time
Depreciation	Systematic allocation of acquisition costs of a long-lived asset Total Cost/Months of expected use
Income Statement	Report of all revenues and expenses in a reporting period
Net Income	"Bottom Line" revenue-expenses
Net loss	negative net income
Cash Dividends	Distributions of cash to stockholders Reduce retained earnings
Statement of Stockholders' Equity	Statement of all changes in a year to the equity account
3 steps to a cash dividend	1. Declaration Date - board announces intent to pay 2. Record Date - if you hold stock on this date, you get dividend 3. Payment Date - dividends are paid
Accumulated Deficit	Negative retained earnings
EPS	Earnings Per Share Net Income/Shares Available
P-E Ratio	Price-Earnings Ratio Price per Share/EPS
Dividend-Yield	Divident Yield=Dividends per Share/Stock Price
Divident-Payout	Divident-Payout=Dividends per Share/EPS

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