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Flashcards in Exam 1 Deck (77):
1

CPA

certified public accountant

2

GAAP

generally accepted accounting principles

3

SEC

securities and exchange commission

4

FASB

financial accounting standards board

5

an examination of the financial reports to ensure that they represent what they claim and conform with generally accepted accounting principles

audit

6

an unincorporated business owned by one person

sole proprietorship

7

an incorporated entity that issues shares of stock as evidence of ownership

corporation

8

a system that collects and processes financial information about an organization and reports that information to decision makers

accounting

9

the organization for which financial data are to be collected (separate and distinct from its owners

accounting entity

10

a report that describes the auditor's opinion of the fairness of the financial statement presentations and the evidence gathered to support that opinion

audit report

11

a company with stock that can be bought and sold by investors on established stock exchanges

publicly traded

12

an unincorporated business owned by two or more persons

partnership

13

measurement of information about an entity in terms of the dollar or other national monetary unit

unit of measure

14

an exchange between an entity and other parties

transaction

15

the concept that businesses will operate into the foreseeable future

the going concern assumption

16

reports assets, liabilities, and stockholders' equity

balance sheet

17

probable debts or obligations to be settled with assets or services

liabilities

18

the fundamental accounting model

assets = liabilities + stockholders' equity

19

represents the shares issued at par value

common stock

20

the concept that assets should be recorded at the amount paid on the exchange date

historical cost

21

a standardized format used to accumulate data about each item reported on financial statements

account

22

every transaction has at least two effects on the accounting equation

dual effects

23

cumulative earnings of a company that are not distributed to the owners

retained earnings

24

economic resources to be used or turned into cash within one year

current assets

25

business transactions are accounted for separately from the transactions of the owners

separate entity assumption

26

a legal amount per share

par value

27

useful information should be complete, neutral and free from error

faithful representation

28

useful information has predictive and feedback value

relevance

29

financing provided by owners and by business operations

stockholders' equity

30

What FS: expenses

income statement

31

What FS: cash flow from investing activities

statement of cash flows

32

FS: assets

balance sheet

33

FS: dividends

statement of stockholders' equity

34

FS: revenues

income statement

35

FS: cash flow from operating activities

statement of cash flows

36

FS: liabilities

balance sheet

37

FS: cash flow from financing activities

statement of cash flows

38

what is it? retained earnings

stockholders' equity

39

what is accounts receivable

asset

40

what is sales revenue

revenue

41

what is property, plant, and equipment

asset

42

what is cost of goods sold

expense

43

what is inventories

asset

44

what is interest expense

expense

45

what is accounts payable

liability

46

what is land

asset

47

current, nc, or SE? accounts receiveable

CA

48

c, nc, or se? retained earnings

SE

49

c, nc, or se? accrued expenses payable

CL

50

c, nc, or se? prepaid expenses

CA

51

c, nc, or se? common stock

SE

52

c, nc, or se? long term investments

NCA

53

c, nc, or se? plant, property, and equipment

NCA

54

c, nc, or se? accounts payable

CL

55

c, nc, or se? short term investments

CA

56

c, nc, or se? long term debt

NCL

57

cost does not equal

value

58

which organizations write accounting rules

FASB, SEC, and IASB

59

what is the goal of IASB

to have worldwide acceptance of a set of international financial reporting standards

60

what are the four basic financial statements provided in an annual report

balance sheet, income statement (there is also comprehensive income), state of cash flows, and statement of stockholders' equity

61

recognition of revenue when it is received in cash and matching expenses with revenue in the appropriate accounting period

accrual basis of accounting

62

what are some alternative names for the income statement

statement of operations; statement of earnings; and statement of profit and loss

63

alternative names for net revenues

net sales, sales, operating revenue

64

alternative names for net income

net profit and net earnings

65

alternative name for balance sheet

statement of financial position

66

alternative name for statement of cash flows

none

67

what is the MD and A

the managements discussion and analysis of financial condition and results of operations

68

a company's annual financial report

10-K

69

a company's quarterly financial report

10-Q

70

the primary responsibility for a company's financial statements lies with

the company's management

71

what is true regarding the income statement

the income statement is sometimes called the statement of operations

72

what is false regarding the balance sheet

the balance sheet reports the changes in specific account balances over a period of time: FALSE

73

when expenses exceed revenues in a given period

retained earnings are decreased

74

what does an unqualified or unmodified auditor's report indicate

the financial statements present fairly the financial position, the results of operations, and the changes in cash flows for the company

75

what is does the concept of business entity mean

it means that the business is separate from the owners and creditors and should be accounted for as a separate, independent entity

76

debit

left side of the account

77

credit

right side of the account