Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Financial Accounting > Unit 1 > Flashcards

Unit 1 Flashcards

1
Q

Accounting

A

The process of identifying, measuring, recording, communicating a organizations financial activity to it’s users

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Internal users

A

plan, organize and operate the economic activies of an organization.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

managerial accounting

A

provides financial information thatserves the decision making needs of internal users

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

financial accounting

A

provides financial information that serves the needs of external users.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

external users

A

Investors, creditors, labour unions, customers. Users who do not work for the company.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

organization

A

a group of individuals who come together to achieve mutual goals and objectives

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

business organization

A

provides a service or sells a product for profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

non-business organization

A

exists to meet various societal needs and it does not have the goal of earning a profit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

proprietorship

A

a business owned by one person. Business and owner are not a seperate legal entity. Unlimited liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

partnership

A

a business owned by 2+ individuals. Not a seperate legal entity. Unlimited liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

corporation

A

a business owned by 2+ individuals who are shareholders. Share holders own shares. Seperate legal entity. Limited liability. Corporation managed by a board of directors which is elected by shareholders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

shares

A

units of ownership in a corporation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

common shares

A

when there is only 1 type of share in a corporation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

board of directors

A

manages a corporation, but does not participate in day-to-day. Hires officers of corporation for this.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

hire officers of a corporation

A

President, VP finance, VP marketing, VP production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

PE (private enterprise)

A

corporation whose shares are not available for public sale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

PAE (publicly accountable enterprise

A

corporation whose shares are available for public sale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

goal of accounting

A

that information provided to users is useful

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

GAAP (Generally Accepting Accounting Principles)

A

ethics that guide accountants to report information that is relevant and faithfully represents a business’s financial activitiesé 6 characteristics, 9 principles

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

characteristics of GAAP

A
  1. relevancy, 2. faithful representation, 3. comparability, 4. verifiability, 5. timeliness, 6. understandability
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Relevancy

A

characteristic of GAAP. Information is relevant to decision making process

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

faithful representation

A

characterstic of GAAP. Information is complete, neutral and error free. Does not omit information.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

verifiable

A

characterstic of GAAP. others could confirm information faithfully represents the financial activity of organization.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

comparability

A

characterstic of GAAP. All information uses similar accounting practices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

timeliness

A

characterstic of GAAP. Information is provided in time to be useful.

26
Q

understandability

A

characterstic of GAAP. information is clear and easy to understand

27
Q

business entity

A

GAAP principle. Each entity keeps seperate financial records.

28
Q

consistency

A

GAAP principle. A business uses the same accounting procedures and policies from period to period.

29
Q

cost

A

GAAP principle. Economic transaction are recorded at actual original cost (the historic cost principle)

30
Q

full disclosure

A

GAAP principle. accounting information communicates all information needed for users to make financial decisions.

31
Q

going concern

A

GAAP principle. assumes a business will continue to exist in the forseeable future.

32
Q

matching

A

GAAP principle. Financial transactions are recorded in the period in which they occur/or were realized

33
Q

materiality

A

GAAP principle. requires businesses to use proper accounting procedures only for items that will affect decisions made by users. Ex. stapler an asset or expense.

34
Q

monetary unit

A

GAAP principle. financial transactions are recorded in a stable unit of money

35
Q

recognition

A

GAAP principle. revenue is reported in period it is earned; expense reported in period it is incurred. Not necessarily when cash is received or payed.

36
Q

IFRS

A

Internation Financial Reporting Standards. for PAEs. GAAP based on this. Issued by IASB

37
Q

IASB

A

International Accounting Standards Board.. Global. Tries to regulate accounting standards through a process of open and transparent discussions among corporations, financial institutions, and accounting firms around the world.

38
Q

ASPE

A

Accounting Standards for Private Entreprise. less arduous that IFRS. based on GAAP

39
Q

AcSB

A

Canadian Accounting Standards Board. Governs accounting standards in Canada. Developped ASPE

40
Q

financial statements

A

Income Statement; Statement Changes in Equity; Balance Sheet; Statement of Cash Flow (SCF); Notes

41
Q

Income Statement

A

Revenues less expenses equals a net income or net loss.

42
Q

revenue

A

services or product are exchanged for an asset

43
Q

expenses

A

the assets used in the process to obtain revenues

44
Q

statement changes in equity

A

shows how share capitol, retained earnings change during a period

45
Q

Issuing of shares

A

when share holders buy shares

46
Q

retained earnings

A

accumulation of all net incomes of a business over it’s life.

47
Q

Dividends

A

distribution of retained earnings to share holders. How much they get depends on how many shares they own.

48
Q

Balance Sheet

A

shows assets, liabilities, equity, for a business at a given point in time. shows the accounting equation and double-entry accounting

49
Q

assets

A

economic resources that can have future benefits. Can be financed through liability or equity.

50
Q

liaibility

A

obligation to pay for an asset in the future

51
Q

Statements of Cash Flow (SCF)

A

for a period of time. Details the inflow and outflow of cash for operating activities; financing activities; investing activities

52
Q

Notes

A

accompany financial statements. Give additional detail.

53
Q

Operating Activities

A

the day-to-day activities to generate net income

54
Q

Investing activities

A

buying assets in order to create more revenue

55
Q

financing activities

A

raises money to invest in assets

56
Q

accounting equation

A

Assets = Liabilities + Equity

57
Q

financial transaction

A

an economical echange recorded through source documentation.

58
Q

double-entry accounting

A

with each financial transaction there is a change on each side of the accounting equation. This is double-entry accounting.

59
Q

fiscal year

A

end of a 12 month period

60
Q

annual financial statements

A

produced at year-end (end of 12 month fiscal year)

61
Q

interim financial statements

A

may be produced at interim (ex. every 3 months) especially for corporations.

Financial Accounting (10 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions