Accounting, More Than Numbers & The Accounting Profession
the process of collecting, recording, classifying, summarizing, reporting, & analyzing financial activities
What is accounting?
Assets - Liabilities =
What is owner's equity?
net sales - costs of goods sold =
What is gross profit?
the summary of the money flowing into and out of a firm
What is a statement of cash flows?
calculating and interpreting financial ratios using data taken from the firm's financial statements in order to assess its condition and performance
What is ratio analysis?
provides financial information that managers inside the organization can use to evaluate and make decisions about current and future operations
Each transaction is recorded chronologically in this.
What is a journal?
The two major categories of expenses on the income statement.
What is cost of goods sold and operating expenses?
cash flow from ? is related to the the production of the firm's goods or services.
What is operating activities?
A company wants a current ratio of at least this.
What is 2?
Accounting standards used in the U.S.
What is GAAP, generally accepted accounting principles?
A statement of a business at a particular point in time.
What is a balance sheet?
If expenses are greater than revenue.
What is a net loss?
Delicious Desserts orders 100 lbs of flour. This would ? cash flow.
What is decrease?
Measures how well the firm is using its resources to generate profit and how efficiently it is being managed.
What is profitability ratio?
independent accountants who serve organizations and individuals on a fee basis.
What is public accountants?
Equipment is this.
What is a long-term asset?
? - expenses = net profit or loss
What is revenue?
Cash flow from ? is related to debt and equity financing.
What is financing activities?
A frequently used activity ratio to determine the speed which merchandise is turnover.
What is inventory turnover ratio?
Law passed to define the public corporation-auditor relationship and restricts the types of services auditors can provide to clients.
What is the Sarbanes-Oxley Act?
the amounts left over from profitable operations since the firm's beginning.
What is retained earnings?
statement that shows a summary of a firm's revenues and expenses for a period of time
What is an income statement?
When a company sells an old piece of equipment, the money they would receive is a ? cash flow.
What is positive?
net profit/number of shares of common stock outstanding
What is earnings per share?