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Definition
| This groups together similar assets and similar liabilities, using a number of standard classifications and sections. |
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Term
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Definition
| Assets that a company expects to convert to cash or use up within on year or its operating cycle, whichever is longer. |
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Definition
| The average time that it takes to go from cash to cash in producing revenue--to purchase inventory, sell it on account, and then collect cash from customers. |
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Term
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Definition
1) investments in stocks and bonds of other corporations that are held for more than one year
2) long-term assets such as land or buildings that a company is not currently using in its operating activities. |
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Term
| Property, plant, and equiptment |
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Definition
Assets with relatively long useful lives that a company is currently using in operating the business.
(includes land, buildings, machinery and equipment) |
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Definition
| The practice of allocating the cost of assets to a number of years. |
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Definition
| This shows the total amount of depreciation that the company has expensed thus far in the asset's life. |
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Definition
| Assets that do not have physical substance yet often are very valuable. |
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Definition
| Patents, copyrights, trademarks or trade names that give the company this right for a specified period of time. |
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Definition
| Obligations that the company is to pay within the coming year or operating cycle, whichever is longer. |
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Term
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Definition
| obligations that a company expects to pay after one year. |
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Term
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Definition
| expresses the relationship among selected items of financial statement data. |
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Term
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Definition
expresses the mathematical relationship between one quantity and another.
-It is expressed in terms of either a percentage, a rate, or a simple proportion. |
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Term
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Definition
| Measure the income or operating success of a company for a given period of time |
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Term
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Definition
| Measure short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash |
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Term
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Definition
| Measure the ability of the company to survive over a long period of time |
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Term
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Definition
| covering two years for the same company |
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Term
Industry-Average Comparisons |
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Definition
| based on average ratios for particular industries |
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Term
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Definition
| based on comparisons with a competitor in the same industry. |
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Term
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Definition
| Measure the operating success of a company for a given period of time. |
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Term
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Definition
| measures the net income earned on each share of common stock. |
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Term
| Statement of stockholders' equity |
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Definition
| They use this so that they can report all changes in stockholders' equity accounts |
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Term
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Definition
| its ability to pay obligations expected to become due within the next year or operating cycle |
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Term
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Definition
| The difference between the amounts of current assets and current liabilities |
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Term
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Definition
| measure the short-term ability of the company to pay its maturing obligations and meet unexpected needs for cash. |
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Term
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Definition
| Computed as current assets divided by current liabilities |
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Term
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Definition
| its ability to pay interest as it comes due and to repay the balance of a debt due at its maturity. |
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Term
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Definition
| measure the ability of the company to survive over a long period of time |
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Term
| debt to total assets ratio |
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Definition
| one source of information about long-term debt-paying ability. It measures the percentage of total financing provided by creditors rather than stockholders. |
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Term
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Definition
| describes the cash remaining from operating activities after adjusting for capital expenditures and dividends paid. |
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Term
| Generally Accepted Accounting Principles (GAAP) |
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Definition
| A set of rule and practices having substantial authoritative support. |
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Term
| Securities and Exchange Commission (SEC) |
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Definition
| The agency of the U.S. government that oversees U.S. financial markets and accounting standard-setting bodies. |
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Term
| Public Company Accounting Oversight Board (PCAOB) |
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Definition
| determines auditing standards and reviews auditing firms |
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Term
| Financial Accounting Standards Board (FASB) |
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Definition
| The primary accounting standard-setting body in the US. |
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Term
| International Accounting Standards Board (IASB) |
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Definition
| issues standards (IFRS) that have been adopted by many countries outside of the US |
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Term
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Definition
| if the accounting information would make a difference in a business decision. |
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Term
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Definition
| The information can be depended on. |
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Term
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Definition
| when different companies use the same accounting principles. |
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Term
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Definition
| requires that only those things that can be expressed in money are included in the accounting records |
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Term
| Economic Entity Assumption |
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Definition
| states that every economic entity can be separately identified and accounted for. |
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Term
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Definition
| states that the life of a business can be divided into artificial time periods and that useful reports covering those periods can be prepared for the business. |
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Definition
| states that the business will remain in operation for the foreseeable future. |
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Term
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Definition
| dictates that assets be recorded at their cost |
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Term
| Full disclosure principle |
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Definition
| required that companies disclose all circumstances and events that would make a difference to financial statement users |
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Term
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Definition
| relates to a financial statement item's impact on a company's overall financial condition and operations. |
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Term
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Definition
| means that when preparing financial statements, a company should choose the accounting method that will be least likely to overstate assets or income. |
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