Flashcards
MGMT 301 Chapter 1
Cards in this deck (36)
- 1accountinga system of analyzing, recording, and summarizing the results of a business's activities and then reporting the results to decision makers.
- 2managerial accounting reportsinclude detailed financial plans and continually updated reports bout the operating performance of the company.
- 3financial statementsaccounting reports that summarize the financial results of business and financing activities.
- 4creditorsanyone to whom money is owed
- 5banksuse financial statements to evaluate the risk that they will not be repaid for the money they've loaned to a company.
- 6supplierscheck the business's credit standing and may also ask for its financial statements before entering into significant business relationships.
- 7shareholdersrely on financial statements to evaluate whether the company is financially secure and likely to be a profitable investment.
- 8the basic accounting equationResources owned by the company = resources owed to creditors + to shareholders.
Assets = Liabilities + Shareholder's Equity - 9separate entity assumptionthe financial reports of a business are assumed to include the results of only that business's activities
- 10account payablethe amount owed is called an account payable because purchases made using credit are said to be "on account".
- 11note payablename is used because banks require borrowers to sign a legal document called a note, which describes details about the company's promise to repay the bank.
- 12wages payablewages owed to employees.
- 13taxes payabletaxes owed to government.
- 14assetan economic resource presently controlled by the company; it has measurable value and is expected to benefit the company by producing cash inflows or reducing cash outflows in the future.
- 15liabilitya measurable amount that the company owes to creditors.
- 16shareholder's equityrepresents the owners' claims on the business.
- 17net incomeprofit
revenues - expenses - 18contributed capitalpaid in by shareholders
- 19retained earningsearned by the company
- 20dividendsprofit distributed
- 21financial statements1) income statement
2) statement of retained earnings
3) balance sheet
4) statement of cash flows - 22income statementreports the amount of revenues less expenses for a period of time.
- 23unit of measure assumptionresults of business activities should be reported in an appropriate monetary unit, which in Canada is the Canadian dollar.
- 24accountsaccumulate and report the effects of each different business activity.
- 25statement of retained earningsreports he way that net income and the distribution of dividends affected the financial position of the company during the period.
- 26balance sheetreports the amount of assets, liabilities, and shareholder's equity of a business at a point in time.
- 27any account name containing receivable is an...asset
- 28any account name containing payable is a...liability
- 29statement of cash flowsreports the operating, investing, and financing activities that caused increases and decreases in cash during the period.
- 30generally accepted accounting principles (GAAP)rules of accounting approved by the Canadian Institute of Chartered Accountant for use in Canada.
- 31International Financial Reporting Standards (IFRS)rules of accounting created by the International Accounting Standards Board (ASB) for international use.
- 32publicly accountable profit-oriented enterpriseshave shares traded in a public market or hold assets in a fiduciary capacity for someone else and are required to use IFRS
- 33private enterprisedo not have publicly traded shares in an open market nor do they hold assets in a fiduciary capacity for someone else; have the option to use IFRS or ASPE
- 34Accounting Standards for Private Enterprises (ASPE)rules of accounting that address issues that are more relevant in a private enterprise environment and therefore can be used by private enterprises only.
- 35Canadian Auditing Standards (CAS)provide auditors with up-to-date tools and required procedures in order to carry out high quality financial statement audits in today's complex business environment.
- 36Sarbanes-Oxley Act (SOX)created by the US Congress after the fall of Enron due to accounting fraud; includes regulating on many topics, including internal control systems and certification of executives.
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- Financial Accounting Flashcards on MGMT 301 Chapter 1, created by lmhatchard on 11/09/2013.
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