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EXAM 1
ACCTG
| Question | Answer |
|---|---|
| accounting | an information and measurement system that identifies, records and communicates the economic events of an organization to interest users |
| accounting equation | assets = liabilities + stockholders' equity : must remain balanced, applies to all economic entities regardless of size and business |
| identify element of accounting | specific, applicable and measurable to the business – evidence and relevance |
| record element of accounting | chronological order, systematic process and place, accounting equation |
| communicate element of accounting | internal and external users |
| financial accounting | preparing and analyzing financial statements, external auditing, consulting, criminal investigation (forensic auditor) - investors, lenders |
| managerial accounting | provides financial and nonfinancial information to an organizations managers - provide info aid in determine cost of an organizations products and services, plan future activities, compare actual results to planned results |
| private accounting service | people who work for a particular business |
| public accounting service | working within the fields of audit, tax or advisory services, work for a service provider who provides accounting services |
| government accounting service | work within governmental entities, regulatory agencies, law enforcement or charitable organizations |
| internal users | within the company and companies' decision making process, making operating, investing and financing decisions for the company |
| external users | outside of the company/decision making process, making operating, investing and financing decision for themselves, use general purpose financial statements - lenders, investors, regulators |
| income statement | describes a company's revenues and expenses and computes net income or loss over a period (for year ended) |
| statement of retained earnings | cumulative net income minus any dividend distributions – reports how retained earnings change or the reporting period: net income (loss) - dividends (for current year ended) |
| balance sheet | describes a company's financial position at a point in time (single date) |
| statement of cash flows | identifies cash inflows and outflows over a period; operating activities, investing activities, |
| revenue recognition principle | recognize and record revenue when goods or services are provided to our customers and value it at the amount expected to be received from the customer |
| expense recognition principle | recognize and record expense when resources are used/consumed by our business |
| business entity assumption | business can form with numbers or owners, different legal structures and will be subject to different levels of taxation and owner liability – corporation are our focus |
| fraud triangle | opportunity, pressure and rationalization |
| internal controls | procedures to protect assets, ensure reliable accounting, promote efficiency, and uphold company policies- verified by auditors |
| data visualization | is a graphical presentation of data to help people understand their significance |
| dashboard | a data visualization that includes charts, graphs, and other imaging organized for users to see important trends |
| assets | resources a company own or controls, expected to yield future benefit – a right to use an economic resource which is specific to the entity and can be measured; cash, investments, inventory, patents, etc |
| liabilities | are creditors claim on assets, company obligation to provide assets, products or services - obligation to provide economic resources to a creditor or non owner; unpaid bills, accounts payable, note payable, customer deposits |
| payable | a liability that promises a future outflow of resources |
| equity | the owners claim on assets and is equal to assets minus liabilities - obligation to provide economic resources which are specific to the entity to an owner |
| transaction analysis | how accountants record events in the accounting information system |
| external transactions | are exchanges of value between two entities |
| internal transactions | exchanges within an entity, may or may not affect accounting equation |
| data analytics | a process of analyzing data to identify meaningful relations and trends |
| descriptive analytics | summarizes and describes events from the past |
| diagnostic analytics | reveals and causes of events for the future |
| predictive analytics | predicts likely events for the future |
| prescriptive analytics | creates action plans to achieve a desired future |
| cognitive analytics | involves using AI and machine learning to analyze and understand data in a way that mimics human cognition |
| the accounting cycle | analyze transactions, journalize, post from journal to ledger, trial balance |
| account | a record of increases and decreases in a specific asset, liability, equity, revenue or expense |
| unearned revenue | a liability that is recorded when customers pay in advance for products; magazine subscription, rent |
| ledger | a record of all accounts and their balances, arranged by account type |
| journal /journal entries | Record each transaction chronologically in a journal – a complete record of each transaction in one place |
| chart of accounts | a list of all ledger accounts with an identification number assigned to each account |
| double entry accounting | captures at least two impacts to a business account, demands accounting equation remains balanced |
| t-account | represents a ledger account and is used to show the effects of transactions; debits and credits |
| trial balance | a list of all ledger accounts and their balances at a point in time |
| posting | : the process of transferring information from the general journal to the general ledger |
| direct materials | materials that are crucial parts of a finished product (bike; tires, seat, pedals, brakes, etc) - prime cost |
| direct labor | refers to employees who directly convert materials into finished goods - prime and conversion cost |
| manufacturing overhead | all manufacturing costs that are not direct materials or labor - conversion cost - indirect labor/materials, factory utilities, maintenance, etc |
| product costs | production costs necessary to create a product and consist of direct materials, labor, factory overhead |
| period costs | nonproduction costs linked to a time period- reported on income statement as selling expense or general/admin expense (manufacturing costs) |
| raw material inventory | the cost of materials a company acquired to use in making products |
| work in process inventory | costs of direct materials, labor and overhead for partially completed goods = beginning balance + DM + DL + MOH - COGM |
| total manufacturing cost | direct materials used + direct labor used + MOH used |
| finished goods inventory | consists of costs of direct materials, labor and overhead of completed products |
| schedule of COGM | lists the types and amounts of costs incurred in manufacturing (for fiscal year ended) |
| COGM | total manufacturing cost + beginning WIP - ending WIP |
| 3 functions of management | planning, controlling, directing |
| selling expense | period cost - sales commission, ad campaigns, shipping and delivery cost |
| general/admin expense | period cost - office/building rent, insurance, office utilities, corporate salaries |
| prime costs | consist of direct materials costs and direct labor costs |
| conversion costs | costs incurred in converting raw materials to finished goods (direct labor and factory overhead) |
| unit cost of production | = total manufacturing cost / total units produced |
Created by:
kayleejh0829