Financial Statements
Document that shows revenues, expenses, and profit or loss over a period.
What is an Income Statement?
A CPA must do this to verify financial statements are accurate.
What is Auditing?
This ratio compares total current assets to current liabilities.
What is the Current Ratio?
The process of recording and summarizing financial data.
What is Accounting?
Things of value a company owns.
What are Assets?
This statement shows what a company owns and owes at a specific moment.
What is a Balance Sheet?
An accountant who works for just one company.
What is a Private Accountant?
This ratio excludes inventory when measuring liquidity.
What is the Acid-Test (Quick) Ratio?
U.S. standards used in financial reporting.
What are Generally Accepted Accounting Principals? (GAAP)
Short-term debts due within one year.
What are Current Liabilities?
This shows how cash moves in and out of a firm.
What is a Statement of Cash Flows?
This professional must pass an exam and can issue auditor’s opinions.
What is a Certified Public Accountant? (CPA)
This ratio shows how fast inventory is sold and replaced.
What is Inventory Turnover Ratio?
A method where each transaction affects two accounts.
What is Double-Entry Bookkeeping?
Long-term items like buildings or machines.
What are Fixed Assets?
A document summarizing company activity and finances annually.
What is an Annual Report?
Accountants who offer services to multiple clients for a fee.
What is a Public Accountant?
This measures a firm's ability to generate profits.
What is Profitability Ratios?
Reducing asset value over time due to wear or obsolescence.
What is Depreciation?
Long-term claims due in more than a year.
What are Long-Term Liabilities?
A detailed breakdown of profit margin after tax and expenses.
What is Net Profit Margin?
These accountants provide internal decision-making data.
What is a Managerial Accountant? (or CMA)
Ratio comparing total liabilities to owner’s investment.
What is the Debt-To-Equity Ratio?
Law passed in 2002 to improve corporate financial practices.
What is the Sarbanes-Oxley Act?
Assets with no physical form like patents or trademarks.
What are Intangible Assets?