Introduction to Financials
Further Look at Financials
Accounting Information System
Accrual Accounting Concepts
Merchandising Operations
100
A business organized as a separate legal entity and owned by stockholders.
What is a corporation?
100
Measures of the short-term ability of the enterprise to pay its maturing obligations.
What are liquidity ratios?
100
The entire group of accounts maintained by a company.
What is a ledger (t-account)?
100
Revenue is recognized when earned.
What is the revenue recognition principle?
100
Gross profit divided by net sales.
What is the gross profit rate?
200
Managers who use accounting information to plan, organize, and run a business.
Who are internal users?
200
Measures of the ability of the company to survive over a long period of time.
What are solvency ratios?
200
A list of accounts and their balances at a given time.
What is a trial balance?
200
Expenses paid before they are incurred.
What are prepaid expenses?
200
Sales less sales returns and allowances and sales discounts.
What is net sales?
300
Activities involved in collecting the necessary funds to start and run the business.
What are financing activities?
300
The excess of current assets over current liabilities.
What is working capital?
300
Shows the debit and credit effects of specific transactions.
What is a journal?
300
Efforts (expenses) are related to accomplishments (revenue).
What is the matching principle?
300
Specifies the amount of cash discount and time period during which it is offered.
What are credit terms?
400
Reports the assets, liabilities, and stockholders’ equity of a business at a specific date.
What is a balance sheet?
400
(Net income – preferred stock dividends) divided by average common shares outstanding.
What is earnings per share (eps)?
400
The side which increases an account.
What is the normal balance?
400
Revenues earned but not yet received.
What are accrued revenues?
400
Freight cost to deliver goods to customers reported as an operating expense.
What is freight-out?
500
The claims of owners on the assets of a corporation.
What is stockholders' equity?
500
Current assets divided by current liabilities.
What is the current ratio?
500
Transferring journal entries to ledger accounts.
What is posting?
500
Expenses incurred but not yet paid.
What are accrued expenses?
500
Accounts that are offset against a revenue (sales) account on the income statement.
What are sales returns and allowances and sales discounts (contra revenue)?
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