Busy. Please wait.
or

show password
Forgot Password?

Don't have an account?  Sign up 
or

Username is available taken
show password

why


Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account.
We do not share your email address with others. It is only used to allow you to reset your password. For details read our Privacy Policy and Terms of Service.


Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
Don't know
Know
remaining cards
Save
0:01
To flip the current card, click it or press the Spacebar key.  To move the current card to one of the three colored boxes, click on the box.  You may also press the UP ARROW key to move the card to the "Know" box, the DOWN ARROW key to move the card to the "Don't know" box, or the RIGHT ARROW key to move the card to the Remaining box.  You may also click on the card displayed in any of the three boxes to bring that card back to the center.

Pass complete!

"Know" box contains:
Time elapsed:
Retries:
restart all cards
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

Chap 2 pg 85

Useful Acct.

QuestionAnswer
What characteristics make information useful? understandability, relevance, reliability, comparability, consistency, materiality, conservatism
Understandability The quality of accounting information that makes it comprehensible to those willing to spend the necessary time.
Relevance The capacity of information to make a difference in a decision.
Reliability The quality that makes accounting information dependable in representing the events that it purports to represent.
Comparability For accounting information the quality that allows a user to analyze two or more companies and look for similarities and differences.
Depreciation The process of allocating the cost of long-term tangible asset over its useful life.
Consistency For accounting information, the quality that allows a user to compare two or more accounting periods for a single company.
Materiality The magnitude of an accounting information omission or misstatement that will affect the judgment of someone relying on the information.
Conservatism The practice of using the least optimistic estimate when two estimates of amounts are about equally likely.
Operating cycle The period of time between the purchase of inventory and the collection of any receivable from the sale of the inventory.
Current asset An asset that is expected to be realized in cash or sold or consumed during the operating cycle or within one year if the cycle is shorter than one year.
Current liability An obligation that will be satisfied within the next operating cycle or within one year if the cycle is shorter than on year.
Liquidity The ability of a company to pay its debts as they come due.
Working capital Current assets minus current liabilities.
Current ratio Current assets divider by current liabilities.
Single-step income statement An income statement in which all expenses are added together and subtracted from all revenues.
Multiple-step income statement An income statement that shows classifications of revenues and expenses as well as important subtotals.
Gross profit Sales less cost of goods sold.
Profit margin Net income divided by sales. Alternate term: Return on sale.
Auditors' report The opinion rendered by a public accounting firm concerning the fairness of the presentation of the financial statements. Alternate term: Report of independent accountants.
Created by: sam6204