Economics
The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling
What is Inflation?
The summary of profit-generating activities during a period of time
What is the Income statement?
The total amount of a specific good or service that is available to consumers
What is supply
The summary of how a company generates and uses its cash during a period of time
What is a cash flow statement?
Consumption + Investment + Government Purchases + Net Exports equals this
What is GDP?
When economic output is not adjusted for inflation
What is Nominal GDP?
transactions are recorded only when cash changes hands
What is cash-based accounting?
The law of supply and demand determines this.
the listing of what a company owns and owes at a point in time
When the price of money changes so rapidly that it becomes essentially worthless
What is hyperinflation?
The fluctuations in economic growth.
What is the business cycle?
The process of producing false financial information
What is "cooking the books"?
Goods that can be used to replace each other
What are substitute goods?
recognizes the financial effect of an activity when the activity takes place without regards to the actual movement of cash
What is Accrual Accounting?
The percentage of the labour force that is seeking a job but does not have one
What is the unemployment rate?
a fixed-weight price index using a fixed basket of goods that are representative of what a typical consumer purchases each month
What is the Consumer Price Index (CPI)?
Revenues less the direct cost of goods sold (COGS)
What is the Gross Margin?
The benefits you could have received by taking an alternative action
What is an opportunity cost?
Short term assets less short-term liabilities
What is net working capital?
An economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power
What is Purchasing Power Parity?
When growth in the economy happens too quickly and causes instability
What is overheating?
This represents a long-term obligation of a company to its owners
What is Owner's equity?
When quantity supplied and quantity demanded are equal when the supply function and demand function intersect
What is equilibrium?
This is the fundamental equation of accounting
What is Assets (A) = Liabilities (L) + Owners’ Equity (OE) ?
when the government use taxation and public spending in order to control the total demand for goods and services
What is fiscal policy?