Accounting principles
Accounting entries will be recorded on the basis of objective evidence
What is objectivity?
Economic resources owned by a company
What are assets?
The profit a company makes after deducting the costs associated with making and selling its products
What is gross profit?
Measures the ability of a company to make money
What is profitability?
Reduction in price gained by buying in quantity
What is quantity discount?
Any given company plans to remain in existence for the foreseeable future
What is "going concern"?
Economic obligations of an entity
What are liabilities?
Contains an itemized listing of revenue and expenses
What is the body?
Ability of an asset to be quickly converted to cash
What is liquidity?
An additional quantity of a product that is kept on hand as a buffer
What is safety stock?
Expenses directly associated with the production of revenues be reported within the same period
What is "matching"?
Assets converted to cash within 1 year
What are current assets?
Area of the income statement where the company's name is listed
What is the heading?
Evaluates a company’s long-term ability to meet all financial obligations
What is solvency?
The point at which procurement costs and carrying costs are equal
What is economic order quantity?
Concepts and procedures for related items within financial statements are applied for entire accounting period
What is "consistency"?
Assets-Liabilities=
What is owner's equity?
The cost to the pharmacy of the goods that constituted inventory and were sold to patients
What is cost of goods sold?
To assess efficiency in the management of inventory
What is inventory turnover ratio?
A reduction in price offered in exchange for prompt payment
What is cash discount?
Acknowledges the significance of various decisions and their effect on financial statements
What is "materiality"?
Represents the owner’s net worth or interest in the assets of a business
What is owner's (stockholder's) equity?
Location of income statement where salaries are located
What are operating expenses?
Compares financial results of one company’s ratios to ratios of other similar companies
What is horizontal financial analysis?
The cost associated with the act of purchasing
What is procurement costs?