Q2 Terms

Part of a company that can be separately identified by the products or services that it provides or by the geographic markets that it serves; also called segment.

Statement that expresses each amount as a percent of a base amount. In the balance sheet, total assets is usually the base and is expressed as 100%. In the income statement, net sales is usually the base.

Statement with data for two or more successive periods placed in side-by-side columns, often with changes shown in dollar amounts and percents.

Company's productivity in using its assets; usually measured relative to how much revenue a certain level of assets generates.

Portion of total assets provided by equity, computed as total equity divided by total assets.

Gains or losses reported separately from continuing operations because they are both unusual and infrequent.

Process of communicating information relevant to investors, creditors, and others in making investment, credit, and business decisions.

Application of analytical tools to general-purpose financial statements and related data for making business decisions.

Statements published periodically for use by a variety of interested parties; includes the income statement, balance sheet, statement of owner's equity (or statement of retained earnings for a corporation), statement of cash flows, and notes to these statements.

Comparison of a company's financial condition and performance across time.

Gain or loss not expected to recur given the operating environment of the business.

Availability of resources to meet short-term cash requirements.

Expectations (both good and bad) about a company's future performance as assessed by users and other interested parties.

Company's ability to generate an adequate return on invested capital.

termination of key relations between financial statement items as reflected in numerical measures.

Company's long-run financial viability and its ability to cover long-term obligations.

Gain or loss that is abnormal or unrelated to the company;s ordinary activities and environment.

Evaluation of each financial statement item or group of items in terms of a specific base amount.

Current assets minus current liabilities at a point in time.

Concept requiring every manager and employee continually to look to improve operations.

Expenditures incurred in converting raw materials to finished goods; includes direct labor costs and overhead costs.

Costs incurred for the benefit of one specific cost object.

Efforts of employees who physically convert materials to finished product.

Factory activities supporting the production process that are not direct material or direct labor; also called overhead and manufacturing overhead.

Account that controls the finished goods files, which acts as a subsidiary ledger (of the Inventory account) in which the costs of finished goods that are ready for sale are recorded.

Cost that does not change with changes in the volume of activity.

Account in which costs are accumulated for products that are in the process of being produced but are not yet complete; also called work in process inventory.

Costs incurred for the benefit of more than one cost object.

Efforts of production employees who do not work specifically on converting direct materials into finished products and who are not clearly identified with specific units or batches of product.

Material used to support the production process but not clearly identified with products or batches of product.

Area of accounting aimed mainly at serving the decision-making needs of internal users; also called management accounting.

Report that summarizes the types and amounts of costs incurred in a company's production process for a period; also called cost of goods manufacturing statement.

Potential benefit lost by choosing a specific action from two or more alternatives.

Cost incurred or avoided as a result of management's decisions.

Expenditures directly identified with the production of finished goods; include direct materials costs and direct labor costs.

Costs that are capitalized as inventory because they produce benefits expected to have future value; include direct materials, direct labor, and overhead.

Cost already incurred and cannot be avoided or changed.