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  1. Revenuesmeasusre the inflows of assets from selling goods / services to customers

          

  2. Managment's Discussion and Analysis (MD&A)A discussion of managment's views of the company's performance; required by the SEC to be included in annual report to shareholders.

    Items commented: liquidity, operations, segments and effects of inflation.

          

  3. Conceptual framework1. Objectives of financial reporting
    2. Qualitative charateristics of accounting information
    - Relevance
    - Reliability
    - Comparability
    3. Elements of financial statements
    4. Recognition and measurement principles

          

  4. Current Assetscash and ssets that firm expects to turn into chs within one year

          

  5. RealizationTeh accounting practice of delayin the reconition of gains and losses from changes in teh market price of assets until the firm sells the assets.

          

  6. When is a firm's fiscal year differ from a calandar year?Management, under the oversight of the firm's govering board.

          

  7. Monetary amountMeasuring unit

          

  8. Net Incomeexpenses for a period exceed revenues

          

  9. ComparabilityTeh concept that should disclose seperately only those events that are relatively importatnt for the business.

          

  10. Cash Basis of AccountingFirm measure performance from selling goods / services as it recieves cash from customers

    Performance measurement does not include cash reciepts from financing activities.

    Most used for:
    - computing personal income
    - firms with medium-term assets / no long-term
    - professional services who have no investments in inventories

          

  11. Annual report to shareholdersManagers and governing boards of reporting entities select from accounting principles provided by standard setters and regulatory bodies and prepare financial statments, which independent external auditors attest to, to enable users of financial statments to make informed decisions.

          

  12. Audit opinionThe auditor's report containing an attestation or lack thereof

          

  13. LiabilitiesTeh accounting practice of delayin the reconition of gains and losses from changes in teh market price of assets until the firm sells the assets.

          

  14. IFRSFinancial Accounting Standards Board

    Private-sector body comprising of five voting members

    due-process prodedures as contemplates a reporting issue

          

  15. SECSecurities and Exchange Commission

          

  16. Current Liabilitiescash and ssets that firm expects to turn into chs within one year

          

  17. Statement of Cash Flowsreports informtion about cash generated from operating, investing, and financing activities during specified time periods

    explains change in chas between the beginning and end of the period; and seperately diplays changes in catagories

    Sections:
    - operating
    - investing
    - financing

          

  18. Historical Amountcurrent value as of the balance sheet date

          

  19. Retained EarningsRepresents the Net Assets (= total assets - total liabilities)

          

  20. Matching conventionRecognized items are dipicted in words and numbers on the face of the financial statmens, with amounts included in the totals.

    Firm Recognizes revenue when it ships the goods

          

  21. Shareholder EquityAmounts of funds owners have provided and thier claims on the assets of a firm

          

  22. Expensesmeasusre the inflows of assets from selling goods / services to customers

          

  23. IFRSInternational Accounting Standards Board

          

  24. Retained earningsNet income over the life of a corporation less all dividients.

    Owner's equity less contributed capital.

          

  25. IASBInternational Financial Reporting Standards

    Simular framework to FASB

          

  26. Investing activitiesAcquiring and selling securities or productive assets expected to produe revenue over several periods.

          

  27. financial statments(statement of profit and loss)
    terms of Net Income, Earnings and Profit are interchangeable

    Provides information on profitability

    Reports amounts for a period of time (the reporting period)

          

  28. Financial Reporting Process involves:- Managers and govering boards of reporting entities
    - Accounting standard setters and reg. bodies
    - Independent external auditors
    - Users of financial statements

          

  29. Creditorsexpenses for a period exceed revenues

          

  30. Natural business yearTeh concept that should disclose seperately only those events that are relatively importatnt for the business.

          

  31. Ballance Sheet
    Looks at resources from two angles
    Assets the firm currently holds
    Assets = Liabilities + Shareholder's equity

    Claims of creitors and owners who provided funds
    Investing = Financing
    Resources = Sources of Resources
    Resources = Claims on Resources

          

  32. FASB - Conceptual FrameworkA coherent system of interrelated objectives and fundamentals, promulgated by the FASB primarily though its SFAC publications; intended to lead to consistent standars for financial accounting and reporting.

          

  33. Publicly tradedCreditors claims for funds; ussally because goods or services have been provided

    Firm has previously recieved benifits for which it must pay a specified amount on a specified date

          

  34. GAAPGenerally Accepted Accounting Principles

          

  35. Reporting items on firm's balance sheet:

    Historical amounts or Current amounts
    Income statment - connects two successive balance sheets through effect on retained erarnings Net Income that is not paid to shareholders as dividends increased retained earnings.

    Statement of Cash Flow - connects two successive balance sheets because it explains the change in cash from operationg, financing, and investing activities.

          

  36. RealizationRefers to converting a noncash item to cash (ie.- collecting an account receivable)

    Firm Realizes revenue when it collects the cash.

          

  37. Two successive balance sheets for:

    Income Statement

    Statement of Cash Flows
    Management, under the oversight of the firm's govering board.

          

  38. ManagersEconomic resources to provide future economic benifits to a firm (buildings and equipmenet)

          

  39. Shareholder's equityProprietorshiop or owners' equity of a corporation

          

  40. Historical amountAquisition cost; orginal cost; a sunk cost

          

  41. Creditorsmeasusre the inflows of assets from selling goods / services to customers

          

  42. Governing BoardBoard of Directors

          

  43. Income Statement1. Balance sheet - firm's financial position
    2. Income statement - firm's profitiability
    3. Statment of cash flows - firm's cash-generating activity
    4. Statement of retained earnings - shareholder's equity
    5. Notes

          

  44. Goals contrasted with strategiesGoal = an ending position

    Strategy = process of getting from the current position to the goal

          

  45. Opertating activitiesoblicgations a firm expects to pay within one year

          

  46. PCAOBPublic Company Accounting Oversight Board

          

  47. Noncurrent Assetstypically held and used for several years (land, buildigns, euipment, patents, long-term investments in securities)

          

  48. Financingoptaining resources from:
    - owners and providing them with a return on and a return of thier investment

    - creditors and repaying amounts borrowed

          

  49. In what sense are a firm's accounts receivable a source of financing for that firm's customers?Calandar year ends on December 31.

    Fiscal year ends on a date that is determined by the firm, based on its buisness model.

          

  50. Balance Sheetmeasusre the inflows of assets from selling goods / services to customers

          

  51. Net Lossmeasure the outlfow of assets used in generating revenues

    means that an asset decreases or a liability increases

          

  52. Codification projectPronouncements by the FASB issued is a compilation of US GAAP

          

  53. Cash Flow Relations+ Cash at Beginning
    + Cash Flow from Operations
    + Cash Flow from Investing
    + Cash Flow from Financing
    =
    +Cash at End

          

  54. Balance Sheet Relations+ Current Assets
    + Noncurrent Assets
    =
    + Current Liabilities
    + Noncurrent Liabilities
    + Share-holders Equity`

          

  55. Who Prepares a firm's financial statements?Proprietorshiop or owners' equity of a corporation

          

  56. Fiscal yearPeriod of 12 consecutive months chosen by a buisiness as the accounting period for annual reports, not necessaritly a natural buisness year or calendar year.

          

  57. MaterialityTeh concept that should disclose seperately only those events that are relatively importatnt for the business.

          

  58. Dividendsmeasusre the inflows of assets from selling goods / services to customers

          

  59. Accrual Basis of AccountingA 12-month period chosen as the reporting period so that the end of the period coincides with a low point in activitiy or inventories.

          

  60. Income StatementAssets
    Cash
    Accounts Receivable
    Inventories
    Other Current Assets
    Total Current Assets
    Property, Plant and Equiopment
    Other Noncurrent Assets
    Total Assets

    Liabilities and Shareholder Equity
    Accounts Payable
    Current Long Term Debt
    Other Current Liabilities
    Total Current Liabilities
    Long Term Debt
    Other Noncurrent Liabilities
    Total Liabilities
    Common Stock
    Retained Earnings
    Total Shareholders' Equity
    Total Liabilities and Shareholders Equity

          

  61. Convergencemeasusre the inflows of assets from selling goods / services to customers

          

  62. Current Amountcash and ssets that firm expects to turn into chs within one year

          

  63. Accounting period convention, reporting periodManagers and governing boards of reporting entities select from accounting principles provided by standard setters and regulatory bodies and prepare financial statments, which independent external auditors attest to, to enable users of financial statments to make informed decisions.

          

  64. Long-term creditorsMeasuring unit

          

  65. Balance SheetBuisness executives with decision making authority, who are ganets of the shareholders, and are responsible for safeguarding and propertly using the firm's resources.

          

  66. RecognitionTeh accounting practice of delayin the reconition of gains and losses from changes in teh market price of assets until the firm sells the assets.

          

  67. Capital expendituresProvide funds that the firm must repqy, typ. with interest, in specific amounts at specific dates.

          

  68. AssetsSecurities and Exchange Commission

          

  69. U.S. SEC RegistrantA firm incorporated based in the US that lists and trades its securitdies in the US.

          

  70. Retained Earnings Relations+ Retained Earnings
    + Net Income
    - Dividends Declared
    =
    +Retained Earnings

          

  71. RecognitionRecognized items are dipicted in words and numbers on the face of the financial statmens, with amounts included in the totals.

    Firm Recognizes revenue when it ships the goods

          

  72. Statemenet of Shareholds' Equityreports informtion about cash generated from operating, investing, and financing activities during specified time periods

    explains change in chas between the beginning and end of the period; and seperately diplays changes in catagories

    Sections:
    - operating
    - investing
    - financing

          

  73. DividendsA distribution of assets generatred from earnings to owners of a corporation.

          

  74. Statements of Financial Accounting StandardsFASB major pronouncements form - have a title and number

          

  75. Shareholds, stockholdersAmounts of funds owners have provided and thier claims on the assets of a firm

          

  76. Noncurrent Liabiliites and
    Shareholders Equity
    Report prepared once a year for shareholders:
    - balance sheet
    - income sttement
    - statement of cash flows
    - audito's report
    - comments from managment

          

  77. Current amounttypically held and used for several years (land, buildigns, euipment, patents, long-term investments in securities)

          

  78. Sarbanes-Oxley Act(2002) Law in wake of Enron, WorldCom and other scandals.

    Stiffens the requirments for corporate governance, including accoutin issues.

    Standards for audit committees of public companies, the certifications managments must sign, and standards of internal control that companies must meet.

          

  79. FASBFinancial Accounting Standards Board

    Private-sector body comprising of five voting members

    due-process prodedures as contemplates a reporting issue

          

  80. Financial reporting processManagers and governing boards of reporting entities select from accounting principles provided by standard setters and regulatory bodies and prepare financial statments, which independent external auditors attest to, to enable users of financial statments to make informed decisions.