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ACCTG211(SP11-WC) #1
Chapter 1
| Question | Answer |
|---|---|
| Residual from the deduction of all expenses from all revenues | Net Income |
| Description of negative net income | Net Loss |
| Cash transactions related to the ordinary conduct of business e.g., receipts from services performed; payments to employees; payments to vendors | Cash Flow from Operating Activities |
| Companies that sell others' products to their customers e.g., Target (big box retail); Macy's (department store); Best Buy (electronics) | Merchandising Company |
| The costs of generating revenue e.g., advertising, rent, salaries | Expenses |
| Income statement structured as follows: Sales; Less: Cost of Goods Sold; Gross Profit; Less: Operating Expenses; Net Income | Multi-step Income Statement |
| Guidelines for financial reporting | Generally Accepted Accounting Principles (GAAP) |
| A record of a company's financial position at a particular point in time | Balance Sheet |
| A company that does something for its customers e.g., Ameritrade (online brokerage); Price Waterhouse Coopers (accounting & auditing); McKinsey & Co. (management consulting) | Service Company |
| A financial statement that shows all cash collected and disbursed during a fiscal period; cash flows are categorized as operating, investing, or financing | Statement of Cash Flows |
| Things of value owned or controlled by a business e.g., cash; inventories; buildings | Assets |
| The accumulated net income of a company over its life reduced by the total dividends paid to owners during its life; represent cumulative earnings that have been kept in the company; represent the earned portion of the owners' claims | Retained Earnings |
| Cash transactions related to the financing of a business, e.g., issuance of stock to owners; repayment of loan principal | Cash Flow from Financing Activities |
| The cost of borrowing money | Interest |
| Owners of a corporation | Shareholder |
| A financial statement that shows changes in the balances of contributed capital and retained earnings during a fiscal period and is structured as follows: Beginning Contributed Capital; Add: Issuance of Common Stock; Ending Contributed Capital; Beginning | Statement of Changes in Stockholders' Equity |
| Companies that produce the goods they sell e.g., Ford Motor (automobiles); Apple (computers); Proctor & Gamble (household products) | Manufacturing Company |
| Units of ownership in a corporation | Shares of Common Stock |
| Owners' claims to the assets of a company; comprised of contributed capital and retained earnings | Stockholders' (Shareholders') Equity |
| Amounts a company owes to parties outside the business e.g., loans; unpaid salaries; supplies purchased on credit | Liabilities |
| Resources used to start a business | Capital |
| Cash transactions that involve the acquisition and disposal of long-term assets used in a business e.g., sale of equipment; purchase of land | Cash Flow from Investing Activities |
| A year in the life of a business e.g., January 1-December 31; October 1–September 30; February 1-January 31 | Fiscal Year |
| A legal form for a business that separates the owners from the business | Corporation |
| Side-by-side reporting of consecutive fiscal period balance sheets | Comparative Balance Sheets |
| An owner's investment in a company | Contributed Capital |
| Distributions of a corporation's earnings to owners | Dividend |
| The amount a company earned from providing goods or services | Revenue (Sales) |
| Marketplace where buyers and sellers exchange their shares of stock (including the Internet) | Stock Exchange (Market) |
Created by:
jlb89
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