GEB 1440 Accounting

Cash and equipment

Examples of line items

Liability

Represents money that you owe for any business expense that year

retained earnings

Which of the following terms equals the total profits of a company minus all dividends (distributions of profits) to stockholders?

Note payable

a written agreement where a borrower obtains a specified amount of money from a lender and promises to pay it back over a specific period. "Loan between you and a lender"

statement of cash flows

A financial statement that provides a summary of the money flowing into and out of a firm during a certain period, typically one year.

income statement

A financial statement that summarizes a firm's revenues and expenses and shows its total profit or loss over a period of time.

annual report

A yearly document that describes a firm's financial status and usually discusses the firm's activities during the past year and its prospects for the future

Asset

An economic resource that meets 3 conditions; Is controlled by the entity, is resulted by a past event or transaction, and provides future economic benefit

net worth

Another term for owners' equity is

Accounting Equation

Assets = Liabilities + Owner's Equity

current assets

Assets that can or will be converted to cash within the next 12 months.

product strategy

Creating a _______ involves choosing a brand name, packaging, colors, a warranty, accessories, and a service program.

fixed asset

Long-term assets used by a firm for more than a year such as land, buildings, and machinery.

intangible assets

Long-term assets with no physical existence, such as patents, copyrights, trademarks, and goodwill.

Owner's Equity

Monetary input to the firm provided by its owners

Long-term liability

Payment that is being paid for over a year

promotion strategy

Personal selling, advertising, public relations, and sales promotions are decisions made when planning the _____ strategy.

debt ratios

Ratios that measure the degree and effect of a firm's use of borrowed funds (debt) to finance its operations.

current liabilities

Short-term claims that are due within a year of the date of the balance sheet.

Accounting

Tells the story of a business

current ratio

The ratio of total current assets to total current liabilities; used to measure a firm's liquidity

Transactions

The way we tell that story is by capturing and recording transactions

assets

Things of value owned by a firm are called its

generally accepted accounting principles

To ensure accuracy and consistency in the way financial information is reported, accountants follow rules known as

marking concept

according to the _________ a firm should first identify consumer needs and then produce the goods and services that will satisfy them.

Accounts payable

an account on your company's general ledger that represents an obligation to pay off a debt to creditors or suppliers. "Money owed by your business to third parties"

Knowledge workers

are workers who create, distribute, and apply knowledge.

pricing strategy

based on demand for the product and the cost of producing that product

Place(distribution) strategy

is creating the means (the channel) by which a product flows from the producer to the consumer. Place includes many parts of the marketing endeavor.

balance sheet

summarizes an organization's financial status at the end of an accounting period

Accounts Receivable

the funds that customers owe your company for products or services that have been invoiced

Customer value

the ratio of benefits to the sacrifice necessary to obtain those benefits.

Note receivable

written promissory notes that give the holder, or bearer, the right to receive the amount outlined in an agreement.