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Cards In This Set
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financial statements
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By increasing the information available about a company, ________ make it easier for a company to attract investors, lenders, and other parties interested in the company's financial status
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The balance sheet
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Reports a company's financial position at a specific point in time and lists the company's resources (assets), obligations (liabilities), and net ownership interest (owners' equity).
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INCOME STATEMENT
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describes a company's financial performance for a designated period of time. A company's expenses are subtracted from its revenues in computing net income.
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STATEMENT OF CASH FLOWS
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details how a company obtained and spent cash during a certain period of time. All of a company's cash transactions are categorized as operating, investing, or financing activities
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NOTES TO THE FINANCIAL STATEMENTS
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Provide information on the accounting assumptions used in preparing the statements and also provide supplemental information not included in the statements themselves. Notes are an integral part of the financial statements.
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The ACCOUNTING EQUATION
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ASSETS= LIABILITIES + EQUITY
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ASSETS
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Economic resources
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LIABILITIES
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Sacrifice of future economic benefits an entity is currently obliged to give another entity as a result of past transaction
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STOCK HOLDERS EQUITY
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The portion of the balance sheet that is that represents the captal received from investors in exchange for stock
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REVENUE
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The amount of assets created through the performance of business operations.
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EXPENSES
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the amount of assets consumed from the performance of business operations and thus are the opposite of revenues.
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PERIOD CONCEPT
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Requires accountants to exercise judgment in unraveling the income effects of business deals that are only partially completed by the end of the reporting period.
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Activities of statement of cash flows
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OPERATING, FINANCING, AND INVESTING
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OPERATING ACTIVITIES
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Those activities involved in producing and selling goods and services and thus comprise the day-to-day business of a company
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INVESTING ACTIVITIES
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the purchase and sale of land, buildings, and equipment. activities also include buying and selling stocks of other companies.
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