BUS 160 - Accounting
GAAP (Generally Accepted Accounting Principles)
aims to ensure that financial statements are: relevant, reliable, consistent and comparable
public accountants
an accountant who provides accounting services to individuals or businesses on a fee basis
Tax accounts
assist with tax preparation
Managerial accountants
assists managers and prepare internal company reports
Costs are deducted from revenue in several stages to show how net income is determined. The first step in this process is to deduct:
costs of goods sold
Balance Sheets usually organize liabilities into two broad categories, which are
current liabilities and long term liabilities
Accumulated Depreciation
decrease in the value of assets such as machinery, equipment and property over time
In the context of the calculation of the net income of a firm, the final step of the process comprises:
deducting the firm's interest expenses and taxes from its net operating income
Internal auditor
detects areas of waste, embezzlement, theft or mismanagement
external auditors
ensure financial statements are prepared correctly
____________ indicate the cash a firm spends, or other assets it uses up, to carry out the business activities necessary to generate its revenue
expenses
financial accountant
prepare accounting statements
Financial Accounting
prepares financial statements so that stakeholders can analyze the financial condition of the firm over a period of time
consultants
provide advise/support
In the context of statement of cash flows, cash flows from operating activities show the amount of cash that flow into the company from
sales revenue
Financial Accounting Standards Board (FASB)
the private board that establishes the generally accepted accounting principles(GAAP) used in the practice of financial accounting
Management Accountants
work within a company in a variety of accounting functions
current assets
Assets that companies expect to convert to cash or use up within one year.
In the context of balance sheets, which of the following is a difference between liabilities and owners' equity?
Liabilities indicate the claims outsiders have against the firm's assets, whereas owners equity refers to the claims the owners have against their firm's assets.
In which of the following ways do public accountants differ from the management accountants
Public accounts conduct external audits, whereas management accountants analyze the financial statements of their own organizaton
In the context of owners equity, which of the following is true of retained earnings?
They are accumulated earnings reinvested in a company rather than being paid to the owners
