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Related Flashcards
Related Topics
Cards In This Set
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Financial Accounting
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Provides economic information in order to enhance decision making
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Managerial Accounting
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Provides economic information to managers and others inside the organization to enhance decision making
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Who makes the accounting rules?What are the rules called?
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FASB (Financial Accounting Standards Board)
GAAP (Generally Accepted Accounting Principals) |
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Oweners' Equity
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PAID IN CAPITAL+RETAINED EARNINGS
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Net Income
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Revenues-Expenses
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Fundamental Accounting Model
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Assets=Liabilities+OE
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Retained Earnings=
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Lifetime Net Income-Dividends
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Statement of Cash Flows
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Shows how cash in a company was changed during a period
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Cash Accounting
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Recognition of event only occurs when cash is received or paid
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Accural Accounting
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Recognition when a transaction is completed--regardless of when actual cash changes hands
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Revenue Recognition concept
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Purpose: to get revenue recorded in the right time period -revenue is recorded when a seller has put forth substantial effort to complete all requirements to sell (usually under an implied or explicit agreement with the buyer) and the price is known
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Matching Principal
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To record expenses during the right period-Match expenses with associated revenues (product expenses)-Expenses which are difficult to match with specific products are matched to the time period in which they are consumed (period expenses)
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Deferrals
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Cash is paid up front but the expense or revenue is being deferred to a later time
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Accruals
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When the expense or revenue is recorded before the cash flow -service now, pay later
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Ending balance of Retained Earnings
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REb+Income-Dividends
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