UO BA 211 Chapter 1 & 2
Accounting
System of mainting records of company operations and communicated info to decision makers
Current Liabilities
accounts payable, differed revenue, accrued liabilities, current portion of long term debt
disclosure notes
additional insights about company operations, accounting principles, contractual agreements, and pending litigation
Common Stock
amount invested by stockholders when purchasing shares of stock
Accounting equation
assets = Liabilities + stockholder equity
accounting equation expanded
assets= liability+ common stock+ (Revenue - expenses- dividends)
10k annual report
balance sheet, income statement, cash flow statement, statement of stockholder equity, notes
Retained earnings
beginning balance + revenue - expenses - dividens
Current Assets
cash , goods/service sales, goods/raw material, sell goods/service, collect cash from customer, accounts receivable, inventory, prepared expenses
Statement of stockholder equity
changes in stockholder equity Beginning Equity Balance: Common Stock (or Preferred Stock) Additional Paid-in Capital (APIC): Retained Earnings: Treasury Stock (if applicable): Other Comprehensive Income (OCI): Ending Equity Balance:
equity components in equation
common stock, preferred stock, capital, retained earnings, dividend, treasury stock, income, owner/shareholder contribution
Limitations of balance sheet
difference between company book value vs market value potential misuse of estimates/judgements
Corporations
legally separate from owners
Long term assets
long-term investments, property/plant equip, operating leases, intangible leases
Long term liabilities
notes payable, bond, lease, pension obligation
statement of cash flow
provides info about cash receipts/payment of company during reporting period (Operating, Investing, financing)
Income statement
reports companies revenue/expenses over interval of time Revenues: Cost of Goods Sold (COGS): Gross Profit: Operating Expenses: Operating Income: Other Income/Expenses: Income Before Taxes: Income Tax Expense: Net Income:
Income Statement
reports company profit or loss Revenues Cost of Goods Sold (COGS) Gross Profit Operating Expenses Operating Income Other Income/Expenses Income Before Taxes Income Tax Expense Net Income
net income
revenue - expenses
retained earnings equation
revenue- expenses - dividends
gross profit
sales revenue - costs of goods sold
stockholder equity equation
total assets-total liabilities
Investing activity
transaction involving sale of resources expected to benefit company
Financing activity
transaction with investor and creditors (Borrowing $)
operating activity
transactions relates to primary operations of company
FASB
Financial Accounting Standards Board
Accounting cycle
Investors/creditors - making decisions-for companies-activity measured- to accountants- who communicate info to investors
Balance Sheet
A financial statement that reports assets, liabilities, and owner's equity on a specific date.
