Chapter 15

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Chapter 15
2012-05-14 22:55:33

Chapter 15
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  1. Accounting
    The process of systematically collecting, analyzing and reporting financial information.
  2. Audit
    An examination of compnys financial statements and the accounting practices that produced them
  3. Generally accceptd principles GAAP's
    An accepted set of guidelines and practices for companies reporting financial information and for the accounting profession.
  4. Managerial accounting
    Provides managers and employees with the information needed to make decisions about a firm's financing, investing, and operating activities
  5. Financial Accounting
    Generates financial statements and reports for interested people outsied an organization
  6. Certified public accountant CPA
    an individual who has met state requirements for accounting education and experience and has passed a rigrous accounting examination prepared by AICPA
  7. Certified management accountant CMA
    an accountant who has met the requirements for education and experience, passe da rigourous exam and is certified by the Institue of Management Accountants
  8. Assets
    The resources that a business owns
  9. Liabilities
    A firm's debts and obligations
  10. Owner's equity
    the diffrence between a firm's assets and its liabilities
  11. Accounting equation
    The basis for the the accounting process assets=liabilities+owners' equity
  12. Double entry bookkeeping system
    A system in which each financial transaction is recorded as two separate accounting entries to maintain the balance shown in the accounting equation
  13. Trial Balance
    A summary of the balances of all general ledger accounts at the end of the accounting period
  14. Annual report
    A report distributed to stockholders and other interested parties that describes a firm's operating activities and its financial condition
  15. Balance sheet
    a summary of the dollar amounts of a firm's assets, liabilities and owners' equity accounts at the end of a specific accounting period
  16. Liquidity
    the ease with which an asset can be converted into cash
  17. Current Assets
    Assets that can be converted quickly into cash or that will be used in one year or less
  18. Fixed Assets
    Assets that will be held or used for a period loner than one year
  19. depreciation
    The process of apportioningthe cost of a fixed asset over the period during which it will be used
  20. Intangible assets
    Assets that do not exist physically but that have a value based on the rights or privileges they confer on a firm
  21. Current liabilities
    Debts that will be repaid in one year or less
  22. Long term liabilities
    debs that need not be repaid for at least one year
  23. Retained earnings
    The portion of a business's profits not distributed to stockholders
  24. Income statement
    A summary of a firms revenues and expenses during a specified accounting period
  25. Revenues
    The dollar amounts earned by a firm from selling goods, providing services or performing business activties
  26. Gross Sales
    The total dollar amount of all goods and services sold during the accounting period
  27. Net Sales
    The Actual dollar amounts received by a firm for the goods and services it has sold after adjustment for returns allowances, and discounts
  28. Gross profit
    A firm's net sales less the cost of goods sold
  29. Operating expenses
    All business costs other than the cost of goods sold
  30. Net Income
    Occurs when revenues exceed expenses
  31. Net Loss
    Occurs when expenses exceed revenues
  32. Statement of cash flows
    A statement that illustrates how the operating, investing, and financing activities of a company affect cash during an accounting period
  33. Financial Ratio
    A number that shows the relationship between two elements of a firm's financial statements
  34. Return on Sales (Profit Margin)
    a financial ratio calculated by dividing net income after taxes by net sales
  35. Return on owners equity
    A financial ration calculated by dividing net invome after taxes by owners equity
  36. Earning per share
    A financial ration calculated by dividing net income after taxes by the number of shares of common stock outstanding
  37. Working Capital
    The difference between current assets and current liabilities
  38. Current Ratio
    A financial ration computed by dividing current assets by current liabilities
  39. Acid test ratio
    A financial ratio calculated by adding cash, marketable securities and receivalbes and dividing the total by current liablilities
  40. Accounts recivable turnover
    A financial ratio calculated by dividing net sales by account receivable
  41. Inventory turnover
    A financial ratio calcutlated by dividing the cost of goods sold in one year by the average value of the inventory
  42. debt-to-owners'-equity ration
    a financial ratio calculated by dividing toatl liablilities by owners equity