Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

SOM Final Exam > Ch. 15 > Flashcards

Ch. 15 Flashcards

(56 cards)

Start Studying
1
Q

Accounting

A

Comprehensive system for collecting, analyzing, and communicating financial information to a firm’s owners and employees, to the public, and to various regulatory agencies

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

Bookkeeping

A

Recording of accounting transactions

Taxes paid, income received, and expenses incurred

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

Accounting Information System (AIS)

A

Organized procedure for measuring, recording, and retaining financial information for use in accounting statements and management reports

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

Controller

A

Chief accounting officer manages all a firm’s accounting activities

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

Financial Accounting

A

Concerned with external users of a company’s financial information

Consumer groups, unions, stockholders, suppliers, creditors, gov’t agencies

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

Managerial accounting

A

Serves internal users of a company’s financial information

Managers at all levels, employees, engineers

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

Certified Public Accountants

A

Accountant licensed by the state and offering services to the public

Must pass a CPA exam

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

Big Four Accounting Firms

A

Deloitte Touche Tohmatsu (USA)
Ernst & Young (UK)
PricewaterhouseCoopers, PwC (UK)
KPMG (Netherlands)

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

Audit

A

Examines a company’s accounting information system to determine whether its financial reports match its operations

Provide audits when applying for loans, selling stock, or going through reconstruction

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

Generally Accepted Accounting Principles (GAAP)

A

Guidelines that govern the content and form of financial reports

Auditing must comply with GAAP

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

Tax Services

A

Assistance provided by CPA’s for tax preparation and tax planning

Can help a business structure operations and investments, and save a company money

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

Management Advisory Services

A

Assistance from CPA firms in financial planning, information systems design, and other areas of concern for client firms

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

CPA Vision Project

A

Core competencies for accounting

-Combination of skills, technology, and knowledge necessary for future CPA’s

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

Private Accountants

A

Salaried accountant hired by a business to carry out day-to-day financial activities

Budgeting, financial planning, internal auditing, payroll, and taxation

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

Managerial Accountants

A

Private accountants who provide financial services to support managers in various business activities with a firm

Marketing, production, engineering

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

Certified Management Accountant

A

Designation awarded by the institute of management accountants that recognize their qualification that they passed IMA’s experience and examination requirements

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

Forensic Accounting

A

Accounting for legal purposes

Investigate businesses and financial issues that may be used in the court of law

Investigate crimes by companies, against companies, and civil disagreements

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

Investigative Accounting

A

Investigate money-laundering or investment swindles

Analyze documents, bank accounts, phone calls, computer records, and people to report legal implications

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

Certified Fraud Examiner (CFE)

A
  • Professional designation administered by the ACFE
  • Qualified in forensic accounting

Covers:

  • Fraud prevention and deterrence
  • Financial transactions
  • Fraud Investigation
  • Legal elements of fraud
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Sarbanes-Oxley Act of 2002

A

Restored public trust in accounting practices by imposing new requirements on financial activities in publicly traded corporations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

The Accounting Equation

A

Assets = Liabilities + Owner’s Equity

ALOE

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

Assets

A

Any economic resource expected to benefit a firm or an individual who owns it

Land, building, equipment, inventory, cash

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

Liability

Study These Flashcards
A

Debt owed by a firm to an outside organization or individual

Accounts payable, notes payable

24
Q

Owner’s Equity

Study These Flashcards
A

Amount of money that owners would receive if they sold all of a firm’s assets and paid all of its liabilities

Common Stock, Dividends

25
Net worth
What a firm owns minus what it owes
26
Financial Statements
Any of several types of reports summarizing a company’s financial status to stakeholders and to aid in managerial decision making Balance sheets, income statements, statements of cash flow
27
Balance sheets
Supply information about a firm’s assets, liabilities AND owner’s equity
28
Current Assets
Asset that can or will be converted into cash within a year Liquidity- Ease with which an asset can be converted into cash -Cash is completely liquid
29
Marketable securities
Purchased short term investments that can be sold quickly
30
Merchandise inventory
The cost of merchandise that has been acquired for sale to customers and is still on hand
31
Fixed Assets
Asset with long term use or value, such as land, buildings, and equipment Depreciation
32
Depreciation
Accounting method for distributing the cost of an asset over its useful time (Cost-Residual Value)/Useful Life
33
Intangible Asset
Nonphysical asset, such as a patent or trademark that has economic value in the form of expected benefit - Patents, trademarks, copyrights, and franchises - Goodwill
34
Current liabilities
Debt that must be paid within one year
35
Accounts payable
Current liabilities that include unpaid bills to suppliers for materials, wages, and taxes
36
Long-term liabilities
Debt that is not due for at least one year Borrowed funds with interest
37
Owner’s Equity
Paid-in capital (money invested by owners in a company) Retained earnings (net profits kept by a firm rather than paid out as dividend payments to stockholders)
38
Income Statements
Known as Bottom Line Financial statement listing a firm’s annual revenues and expenses so that a bottom line shows annual profit or loss Profit = revenue – expenses
39
Revenue
Funds that flow into a business from the sales of goods or services
40
Cost of Goods Sold
Costs of obtaining materials to make physical products sold during the year Used by manufacturing firms
41
Gross Profit
Quick way to calculate profit figure that considers revenues and cost of revenues
42
Cost of Revenues
Costs of obtaining the revenues from other companies during the year Include expenses of labor, energy, and costs of processing consumer transactions
43
Operating expenses
Costs, other than the cost of revenues, that are incurred when producing a good or service Research and development, administrative and general expenses, selling expenses
44
Operating Income
Gross profit minus operating expenses
45
Net income
Gross profit minus operating expenses and income taxes
46
Statement of Cash Flows
Financial statement describing a firm’s yearly cash receipts and cash payments Shows how the company generates and uses cash
47
Budget
Detailed statement of estimated receipts and expenditures for a future period of time Used for planning, controlling, and decision making for 1 year, 3 years, or 5 years
48
Revenue recognition
Earnings are not reported until earning cycle is complete. Earning cycle is complete when: - Sale is complete and the product delivered - The sale price has been collected
49
Full disclosure
Guideline that financial statements should include management’s interpretation and explanation of the numbers in the statement Used to explain why sales have followed a certain trend
50
Three Ratios that determine firm's financial health
Solvency Ratio- - Estimate short-term and long-term risk - Evaluate borrower’s ability to pay debt Profitability Ratio- Measure potential earnings Activity Ratio- Evaluate efficiency of use of assets
51
Short-Term Solvency
Measure a company’s liquidity and its ability to pay immediate debts Uses current ratio measures a company ability to pay current debts out of current assets Current ratio = Assets/Liabilities
52
Long-Term Solvency
Debt (total liabilities)/owner equities Leverage -Ability to finance an investment through borrowed funds Leveraged buyouts- Firm’s willingly taken on debts to buy out other companies
53
Earnings per share
Measures the net profit that the company earns for each share of outstanding stock Determines the size of the dividend that a firm can pare shareholders ***Net income/Net of common shares
54
Activity Ratios
Efficiency in assets Indicated by revenues increasing faster than stock
55
AICPA’s Code of Professional Conduct
Code of ethics for CPA’s as maintained and enforced by the AICPA Serves public interest, maintains integrity, and must be objective and independent
56
International Accounting Standards Board
Organization responsible for developing a set of global accounting standards and for gaining implementation of these standards Many discrepancies in the universal standards of financial reporting

SOM Final Exam (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions