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57 Cards in this Set
- Front
- Back
Accounting
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the recording, measurement, and interpretation of financial information, often used in making business decisions
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GAAP
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generally accepted accounting principles
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SEC
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securities and exchange commission provides oversight
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Certified Public Accountant (CPA)
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an independent professional who provides accounting services to the public (individuals or firms) for a fee
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Private Accountant
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an accountant employed by a corporation, government agency, or other organization
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Forensic Accounting
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analyzing financial data in search of fraudulent entries or financial misconduct
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Accounting Equation
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Assets = Liabilities + Owners Equity
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Double-Entry Bookkeeping
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a system of recording and classifying business transactions in separate accounts in order to maintain the balance of the accounting equation
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Managerial Accounting
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internal use of accounting statements by managers in planing and directing organizational activities
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Cash Flow
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the movement of money through an organization, is management's greatest concern
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Income Statement
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financial report that shows an organization's overall profitability or loss over a period of time
(expenses-revenues) |
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Revenue
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total amount of money received or promised from the sale of goods and services and other activities
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Cost of Goods Sold
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the amount of money the firm spent to buy and produce the products it sold
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Gross Income/Profit
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revenues-cost of goods sold
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Expenses
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the cost incurred in day-to-day operations of an organization
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Depreciation
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a special type of expense included in general and administrative category
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Net Income
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total profit or loss after all expenses are deducted from revenue
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Balance Sheet
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a "snapshot" of an organization's financial position at a given moment
accumulation of all the company's transactions since it began |
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Current Assets
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used or converted to cash within a calender year
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Accounts Receivable
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money owed to the company by clients or customers who have promised to pay at a later date
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Long-Term Assets
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represent a commitment of funds for more than one year
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Current Liabilities
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obligations to short-term creditors
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Accounts Payable
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amounts owed to suppliers for goods and services purchased on credit
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Accrued Expenses
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all unpaid financial obligations incurred by the company
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Types of Liabilities
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Current Liabilities
Accounts Payable Accrued Expenses |
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Ration Analysis
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calculations that measure an organization's financial health
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Profitable Rations
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Profit Margin=Net Income/Sales
Return on Assets=Net Income/Assets Return on Equity=Net Income/Equity |
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Money
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anything generally accepted in exchange for goods and services
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Store of Value
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means of retaining and accumulating wealth
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Measure of Value
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single standard for assigning and comparing values of products and resources
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Medium of Exchange
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accepted as payment for products and resources
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Bartering
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trading one good or service for another of similar value
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Characteristics of Money
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Acceptability
Divisibility Portability Stability Durability Difficulty to Counterfeit |
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Checking Account
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money stored in an account at a bank that can be withdrawn without advance notice
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Savings Account
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accounts with funds that usually cannot be withdrawn without advance notice
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Money Market Account
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higher interest rates than standard bank rates with greater restrictions
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Certificates of Deposit
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savings accounts that guarantee a set interest rate over a period of time providing funds are not withdrawn before maturity
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Credit Cards
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means of access to pre-approved lines of credit granted by a bank or finance company
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Federal Reserve Board
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Fed
guardian of the American financial system independent agency of the federal government established in 1913 to regulate the nation's banking and financial industry |
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Four major functions of the Fed
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1. controls the money supply with monetary policy
2. regulates financial institutions 3. manages regional and national check-clearing procedures 4. supervises the federal deposit insurance of commercial banks in the Federal Reserve system |
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Commercial Banks
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largest and oldest of all financial institutions, relying mainly on checking and savings accounts
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Savings and Loan Associations
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primarily offer savings accounts and make long-term loans for residential mortgages
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Credit Unions
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financial institutions owned and controlled by depositors usually having a common employer, profession, trade group, or religion
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Mutual Savings Banks
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similar to the S&Ls but owned by depositors
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Optimizing Inventory
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objective is to minimize firm's investment in inventory without experiencing productions cutbacks
radio frequency identification technology helps firms track and optimize their inventories |
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Prime Rate
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the interest rate that commercial banks charge their best customers for short-term loans
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Line of Credit
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an arrangement by which a bank agrees to lend a specified amount of money to an organization upon request
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Junk Bonds
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special type of high interest rate bond that carries higher inherent risks
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What kind of market is the stock exchange? Why?
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Secondary
New York stock exchange is involved |
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Preferred Stock
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gives the stockholder preference in distribution of profits, but not voting and control rights
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Common Stock
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most important source of capital for most new companies
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Par Value
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amount printed on the stock certificate
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Market Value
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price at which the stock is trading
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Capital in Excess of Par
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difference between market value and par value
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Securities Market
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provide the mechanism for buying and selling securities
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Stock Market
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dramatic shifts in structure of exchange
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Over-the-Counter Market (OTC)
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network of dealers all over the country and world
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