Q2 Terms

Card Set Information

Q2 Terms
2013-02-14 15:44:20
Q2 Terms

Chapter 13 and 14 terms
Show Answers:

  1. 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.
    Business segment
  2. 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.
    Common-size financial statement
  3. Statement with data for two or more successive periods placed in side-by-side columns, often with changes shown in dollar amounts and percents.
    Comparative financial statements
  4. Company's productivity in using its assets; usually measured relative to how much revenue a certain level of assets generates.
  5. Portion of total assets provided by equity, computed as total equity divided by total assets.
    Equity ratio
  6. Gains or losses reported separately from continuing operations because they are both unusual and infrequent.
    Extraordinary gains and losses
  7. Process of communicating information relevant to investors, creditors, and others in making investment, credit, and business decisions.
    Financial reporting
  8. Application of analytical tools to general-purpose financial statements and related data for making business decisions.
    Financial statement analysis
  9. 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.
    General-purpose financial statements
  10. Comparison of a company's financial condition and performance across time.
    Horizontal analysis
  11. Gain or loss not expected to recur given the operating environment of the business.
    Infrequent gain or loss
  12. Availability of resources to meet short-term cash requirements.
  13. Expectations (both good and bad) about a company's future performance as assessed by users and other interested parties.
    Market prospects
  14. Company's ability to generate an adequate return on invested capital.
  15. termination of key relations between financial statement items as reflected in numerical measures.
    Ratio analysis
  16. Company's long-run financial viability and its ability to cover long-term obligations.
  17. Gain or loss that is abnormal or unrelated to the company;s ordinary activities and environment.
    Unusual gain or loss
  18. Evaluation of each financial statement item or group of items in terms of a specific base amount.
    Vertical analysis
  19. Current assets minus current liabilities at a point in time.
    Working capital
  20. Concept requiring every manager and employee continually to look to improve operations.
    Continuous improvement
  21. Expenditures incurred in converting raw materials to finished goods; includes direct labor costs and overhead costs.
    Conversion costs
  22. Costs incurred for the benefit of one specific cost object.
    Direct costs
  23. Efforts of employees who physically convert materials to finished product.
    Direct labor
  24. Factory activities supporting the production process that are not direct material or direct labor; also called overhead and manufacturing overhead.
    Factory overhead
  25. 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.
    Finished goods inventory
  26. Cost that does not change with changes in the volume of activity.
    Fixed cost
  27. 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.
    Goods in process inventory
  28. Costs incurred for the benefit of more than one cost object.
    Indirect costs
  29. 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.
    Indirect labor
  30. Material used to support the production process but not clearly identified with products or batches of product.
    Indirect material
  31. Area of accounting aimed mainly at serving the decision-making needs of internal users; also called management accounting.
    Managerial accounting
  32. 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.
    Manufacturing statement
  33. Potential benefit lost by choosing a specific action from two or more alternatives.
    Opportunity cost
  34. Cost incurred or avoided as a result of management's decisions.
    Out-of-pocket cost
  35. Expenditures directly identified with the production of finished goods; include direct materials costs and direct labor costs.
    Prime costs
  36. Costs that are capitalized as inventory because they produce benefits expected to have future value; include direct materials, direct labor, and overhead.
    Product costs
  37. Cost already incurred and cannot be avoided or changed.
    Sunk cost