Chapter 17: Using Accounting and Financial Information Flashcards Preview

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Flashcards in Chapter 17: Using Accounting and Financial Information Deck (41)
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1

is the largest financial language of business

accounting

2

when someone talks about _____ they are talking about the information that is provided to managers and decision makers within the organization

managerial accounting

3

the process of collecting, analyzing, and reporting financial information

accounting

4

provides info for managers WITHIN an organization to make decisions about a company's financing, investing, marketing and operating activities

managerial accounting

5

provides info for people OUTSIDE an organization through the generation of standardized financial statements

financial accounting

6

used to ensure accuracy and consistency in the way financial information was reported (old)

generally accepted accounting principles (GAAP)

7

- a set of globally accepted accounting standards
- to provide consistency in financial reporting internationally and replace the GAAP

international financial reporting standard (IFRS)

8

accounting is broken down into 2 broad categories:

financial and managerial accounting

9

3 types of financial statements

balance sheet, income statement, statement of cash flows

10

accounting standards similar to the former Canadian GAAP for private companies

Accounting Standards for Private Enterprises (ASPE)

11

a financial statement that provides a snapshot of a company's financial position by stating assets, liabilities and owner's equity

balance sheet

12

a f.s that provides a summary of how much a company earned over a period of time; revenue, expenses and net income

income statement

13

a f.s that illustrates how the company's operating, investing and financing activities affect cash over a period of time

statement of cash flows

14

- often run at the end of accounting periods (monthly, quarterly, or annually)
- assets - liabilities = owner's equity

balance sheet

15

is the portion of company assets that belong to the owners after all the debts are paid

owner's equity

16

the easier it is to convert an asset to cash, the more

liquid it is

17

having assets that are more ______ places owners in a stronger financial position

liquid

18

assets that can be converted quickly into cash (accounts receivable, cash and short-term investments and inventory)

current assets

19

aren't easily converted into cash or will be held for longer than a year (equpiment, fixed assets and intangible assets)

long-term assets

20

money it owes to suppliers for purchases that were made using credits

accounts payable

21

has liabilities related to upcoming salary and tax payments and do not need to be paid just yet

accrued expenses

22

assets and liabilities are categorized as:

current or long-term

23

assets that can be converted to cash or used in 1 year or less

current assets

24

debts that will be repaid in 1 year or less

current liabilities

25

assets that will be used for longer than 1 year

long-term assets

26

debts that need not to be repaid for at least one year

long-term liabilities

27

records how much the company earns from selling goods/services with the "bottom line" showing the company's profit or loss for the period

income statement

28

the cost of producing or purchasing products for sale

cost of goods sold (COGS)

29

ongoing business expenses such as rent, salaries, utilities, and marketing expenses

operating expense

30

provides some insight into the timing of the investment and financing activities over a period of time along with cash flows generated from the company's primary operating activity, selling products, or providing services to customers

cash flow statements