Exam 4 Flashcards
(104 cards)
1
Q
Accounting
A
The recording measurement and interpretation of financial information
2
Q
Certified Public Accountant
A
Individual who has been certified to provide accounting services ranging from the preparation of financial records and the filing of tax returns to complex audits of corporate financial records
3
Q
Private Accountants
A
Accountants employed by large corporations government agencies and other organizations to prepare and analyze their financial statements
4
Q
Certified Management Accountants
A
Private Accountants who after examination are certified by the IMA
5
Q
Managerial Accounting
A
Internal use of accounting statements by managers in planning and directing the organizations activities
6
Q
Cash Flow
A
The movement of money through an organization
7
Q
Budget
A
Inter financial plan that forecasts expenses and income over a set period of time
8
Q
Annual Report
A
Asummary of the firms financial information
9
Q
Assets
A
things that the company has
10
Q
Liabilities
A
Debts that the firm owes
11
Q
Owner Equity
A
All of the money that has been put into the company that needs to be paid back
12
Q
Accounting Equation
A
Assets=Liabilities+Owners Equity
13
Q
double Entry Bookkeeping
A
System of recording transactions in separate accounts in order to maintain the balance of the accounting equation
14
Q
The Accounting Cycle
A
- Examining source documents
- Recording transactions in accounting journal
- Posting recorded transactions to ledger
- Preparing financial statements
15
Q
Journal
A
Time ordered list of transactions
16
Q
Ledger
A
A book or computer program with separate files for each account
17
Q
Income Statement
A
A financial Report that shows an organizations profitability over a period of time
18
Q
Revenue
A
the total amount of money received from the sale of goods or services
19
Q
Cost of Goods sold
A
The amount of money spend to buy an produce a product
20
Q
Gross income (Profit)
A
Revenue minus the cost of goods sold required to generate revenue
21
Q
Expenses
A
The costs incurred to operate daily
22
Q
Depreciation
A
The process of spreading a cost over a long period of time
23
Q
Net Income
A
Total profit after all expenses
24
Q
Balance Sheet
A
Represents a snapshot of the companies financial position
25
Current Asset
Assets that are converted into cash within the course of the same calendar year
26
Accounts Recievable
money owed the company bu its clients of customers who have promised to pay for the products at a later date
27
Current liabilities
Firms financial obligation to short term costs
28
Accounts Payable
Money owed to suppliers that was purchased with credit
29
Accrued Expenses
Account representing all unpaid financial obligations incurred by the firm
30
Statement of cash flows
explains how the company's cash changes from the beginning of the accounting period to the end
31
Ratio Analysis
Calculations that measure an organizations financial health
32
Profitability ratios
Measure how much operating income or net income an organization is able to generate relative to its assets, owners equity an sales
33
Profit margin
shows the over percentage of profits earned by the company
34
Return on Equity/investments
Shows how much income is generated by each dollar
35
Asset Utilization Ratios
measure how well a firm uses its assets
36
Recievable turnover
Sales divided by accounts receivable
37
Inventory turnover
Indicates how many times a firm sells inventory and replaces it
38
Total Asset turnover
Measures how well an organization uses all of its assets in creating sales
39
Liquidity ratios
Comarpes short term assets to current liabilities to indicate the speed with which a company turn assets into cash
40
Current ratio
dividing current assets by current liabilities
41
Quick Ratio
a stringent measure of liquidity that eliminates inventory.
42
Earnings per share
net income or profit divided by the number of stock shares outstanding; measures the value of earnings per outstanding share.
43
Dividends per share
money paid to the stockholders by the corporation
44
Money
Anything generally accepted in exchange for goods and services
45
Checking Account
Money stored in a bank or other financial institution that can be withdrawn
46
Savings Account
An account with funds that cannot be withdrawn without advance notice and have limits on the withdraws
47
Money Market Account
Slightly higher interest rates, but the owner can only write a certain number of checks of deposits
48
CD (Certificate of Deposit)
Offer a set interest rate if the money is kept in the bank
49
Credit Cards
Cards that allow one to pay something at a later Date
50
Rewards Cards
Credit cArds that Carry a benefit to the user
51
Debit Card
Looks like a credit Card, but functions as a check
52
Federal Reserve Board (fed)
An independent Agency of the Government to regulate the nations banking, and financial industry
53
Monetary policy
The means by which the FED controls to the amount of money available in the economy
54
Open Market Operations
the process where a central bank, like the Federal Reserve in the United States, buys or sells securities in the open market to influence the money supply and credit conditions
55
Reserve Requirement
The percentage of deposits that banking institutions must hold in reserve
56
The discount Rate
The rate of interest that Fed chrages to loan money to any banking institution
57
Credit Controls
The authority to establish and enforce credit rules for financial institutions and some private investors
58
Commercial Banks
financial institutions that accept deposits and offer loans to individuals and businesses. This is the oldest of all banking institutions
59
Savings and Loan Associations
"thrifts" financial institutions that primarily offer savings accounts and make long-term loans for residential mortgages
60
Credit Unions
A financial institution owned and controlled by its depositors who usually have a common employer, profession, trade, group, or religion
61
Mutual Savings Banks
a financial institution chartered by a central or regional government, without capital stock, owned by its members who subscribe to a common fund
62
Federal Deposit Insurance Corporation (FDIC)
An insurance fund established in 1933 that insures individual bank accounts
63
National Credit Union Administration (NCUA)
Regulates and charters credit unions and insures their deposits
64
Insurance Companies
Businesses that protect their clients against financial losses from specific events
65
Pension Funds
Managed investment pools set aside by individuals to provide retirement for members
66
Mutual Fund
Polls investor dollars and invests them in large numbers of well-diversified securities
67
Exchange Traded Funds (ETF)
a basket of securities, such as stocks, bonds, commodities, or currencies, that can be bought and sold throughout the trading day.
68
Brokerage Firms
Buy and sell stocks, bonds, and other securities for their customers and provide financial services
69
Investment Banker
helps businesses and people raise capital by issuing stocks or borrowing money
70
Finance Companies
Businesses that offer short-term loans at substantially higher rates of interest than banks
71
Electronic Funds Transfer
Any movement of funds by means of an electronic terminal
72
Automated Teller Machine
ATM
73
Automated Clearinghouse (ACH)
a network that facilitates electronic funds transfers between financial institutions, primarily for payments and money transfers
74
Working Capital Management
Managing short term assets and liabilities
75
Transaction Balances
Cash Kept on hand by a firm to pay normal daily expenses
76
LockBox
An address for receiving payments
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Marketable securities
Temporary investments of extra cash by organizations for up to one year in the US
78
Treasury bills
Short term debt obligations the US Gov. Sells to raise money
79
Commercial Certificates of Deposit
CD's issued by commercial banks available in minimum amounts of 100,000 that may be traded prior to maturity
80
Commercial Paper
a written promise from one company to another to pay a specific amount of money that will be paid at one time
81
Eurodollar Market
a market for US collars held in foreign countries
82
Trade Credit
Credit extended by suppliers for the purchase of their goods and services
83
Line of Credit
An arrangement by which a bank agrees to lend a specific amount of money to the organization upon request
84
Secured Loans
Loans backed by collateral that the bank can claim is not paid back
85
Unsecured Loans
Loans only backed by the borrowers good reputations
86
Prime Rate
The interest rate commercial banks charge their best customers for short term loans
87
Factor
encompassing the purchasing of accounts receivable (invoices) from a seller by a factor, who then advances cash to the seller and takes on the responsibility of collecting the debt
88
Long term (Fixed) Assets
Assets that are expected to last for many years
89
Capital budgeting
the process a company uses to evaluate and select long-term investments, like purchasing new equipment or building a new facility, that can significantly impact the company's future cash
90
Long-term Liabilities
Debts that will be repaid over a number of years
91
Bonds
a debt security that represents a borrower's promise to repay a principal amount at a specified date and to pay interest
92
Unsecured Bonds
Bonds not backed by collateral
93
Secured Bonds
Bonds backed up by specific Collateral
94
Serial bonds
A type of bond where the principal repayment is made in installments over a series of years, rather than all at once
95
Floating Rate bonds
bonds with interest rates that change with current interest rates otherwise available in the economy
96
Junk bonds
A special type of high interest bonds that carry higher risks
97
Retained Earnings
earnings after expenses that are reinvested in the assets of the firm and being to the owners in form of equity
98
Dividend Yield
the dividend per share divided by the stock price
99
Payout Ratio
The percentage of earnings paid to the stockholders in dividends
100
Primary Market
The market where firms raise financial capital
101
Secondary Markets
Stock exchanges and over the counter markets where investors can trade their securities with other investors
102
Investment Banking
The sale of stocks and bonds for corporations
103
Securities Market
the mechanism for buying and selling securities
104
Over the Counter Market (OTC)
done directly between two parties, without the supervision of an exchange
