1500 Flashcards
C1: What are the four financial statements
Balance Sheet
Income Statmenet
Retained earnings statement
Cash flow statement
C1: Presents a picture at a point in time of what your business owns (its assets) and it owes (Its liabilities)
Balance sheet
C1: Indicates how much of previous income was distributed to owners of your business in form of dividends, and how much was retained in the business to allow for future growth
Retained earnings statmenet
C1: Shows where your business obtained cash during a period of time and how mcuh that cash was used
Cash flow Statement
C2: Assest that a copany expects to convert to cash or use up within one year or its operation cycle, whichever is longer
Current assets
C2: Assets with relatively ling useful lives that are currently used in operating th ebusiness
Current liabilities
C2: Obligations that a company expects to pay after one year
Long term liabilities
C2: Investments in stock and bonds of other corporations hat are heald for more than one year
OR
Long-term assets such as land or building that a company is not currently using in its operating activities
Long-term investments
C10: A technique for evaluating a series of financial statement data over a period of time to determine the increase (decrease) that has taken place, expressed as either a dollar amount or a percentage.
Horizontal Analysis
C10: A technique for evaluating financial statement data that expresses each item in a financial statement as a percentage of a base amount
Vertical Analysis
C10: A technique for evaluating financial statements that expresses the relationship between selected financial statement data
Ratio Analysis
C10: A profitability measure that indicates the amount of income generated by each dollar of assets; calculated as net income divided by average total assets.
Return assets
C10: Measures of the ability of a company to survive over a long period of time, particularly to pay interest as it comes due and to repay the balance of debt at its maturity
Solvency ratio
C10: A measure of the dollars of net income earned for each dollar invested by the owners; computed as income available to common stockholders divided by average common stockholders’ equity
Return on common stockholders’ equity (ROE)
C10: A measure of the liquidity of receivables; computed as net credit sales divided by average net accounts receivable
Accounts receivable turnover
C10: A measure of how efficiently a company uses its assets to generate net sales; computed as net sales divided by average total assets
Asset turnover
C10: the average number of days that receivables are outstanding; calculated as accounts receivable turnover divided into 365 days.
Average collection period
C10: A measure used to evaluate a company’s liquidity and short-term debt-paying ability; calculated as current assets divided by current liabilities
Current ratio
C10: A measure of the average number of days that inventory is held; computed as inventory turnover divided into 365 days
Days in inventory
C10: A measure of the percentage of total financing provided by creditors; computed as total liabilities divided by total assets
Debt to assets ratio
C10: A measure of the net income generated by each dollar of net sales; computed a net income divided by net sales
Profit margin
C10: Measure of the income or operating success of a company for a given period of time.
Profitability ratios
C19:Include the cash effects of transactions that create revenue and expense.
Operating activities
C19: Adjust net income for items that do not affect cash. A great majority of companies (985) use this method.
Indirect Method
C19: What companies factor the indirect meathod for two reasons:
- It is easier and less costly to prepare.
- It focuses on the differences between net income and net cash flow from operating activities.
C19: shows operating cash receipts and payments. It is prepared by adjusting each item in the income statement from the accrual basis to the cash basis.
Direct method
C11: All activities associated with providing a product or performing a service
Value chain
C11: A code of ethical Standard developed by the Institute of Management Accountants
Statement of Ethical professional practice
C11: A method of allocating overhead based on each product’s use of activities in making the product.
Activity-based costing
C11: Systems implemented to reduce defects in finished products with the goal of achieving zero defects
Total quality management
C11: A performance-measurement approaches that uses both financial and non financial measures, tied to company objectives, to evaluate a company’s operations in an integrated fashion
Balance scorecard
C11; Inventory system in which goods are manufactured or purchased just as they are needed for use or sale
Just in time (JIT) inventory
C19; The work of factory employees that has no physical association with the finished product or for which it is impractical to trace the costs to the goods produced.
Indirect Labor
C19: raw materials that can be physically and directly associated with manufacturing the finished product.
Direct materials
C19: A company’s effort to employ sustainable business practices with regard to its employees, society, and the environment.
Corporate social responsibility
C19: Raw materials that do not physical become part of the finished product or that are impractical to trace to the finished product because their physical association with the finished product is too small
Indirect materials
C19: the work of factory employees that can be physically and directly associated with the converting raw materials into finished goods
Direct labor
C19 - A field of accounting that provides economic and financial information fo managers and other internal users
Managerial accounting
C19: Total cost of work in process less the cost of the ending work in process inventory. Cost of all the items completed during the period
Cost of goods manufactured
C19: Manufacturing costs that are indirectly associated with the manufacture of the finished product
Manufacturing overhead
C19: Costs that are matched with the revenue of a specific time period and charged to expense as incurred.
Period costs -
C19: Costs that are a necessary and integral part of producing the finished product. All manufacturing costs are classified as product costs and are included in inventory
Product costs
C19: cost of the beginning work in process plus total manufacturing costs for the current period
Total costs of work in process
C19: The sum of direct materials, direct labor, and manufacturing overhead incurred in the current period.
Total manufacturing costs
C19: Partially complete manufactured units
Work in process inventory
C19: What is the function of planning
Requires managers to look ahead and establish objectives
