Intermediate Financial Accounting - Lecture Review

This set of vocabulary flashcards covers key concepts from Intermediate Financial Accounting, including control accounts, manufacturing costs, partnership structures, and company share capital.

Control Account

A summary account appearing in the general ledger for the purpose of controlling the accuracy of the detailed postings to other ledgers.

Contra

A settlement or agreement representing a situation where a supplier is also a customer, used to find out the difference to pay or receive between the two accounts.

Prime Cost

The total of all direct costs, which includes direct material, direct labour, and direct expenses.

Unrealized Profit

The factory profit included in the value of closing finished goods inventory when a firm values stocks at market value rather than at cost.

Incomplete Records

Accounting records that fall short of complete double entry, sometimes referred to as single entry accounting.

Limited Partners (LPs)

Partners whose liability for the debts of the partnership is limited to their capital contribution and who are not allowed to participate in management.

Goodwill

An intangible asset arising from connection and reputation in respect of a continuing business, often due to good customer relationships or staff.

Authorized Share Capital

The total amount of share capital, also known as registered or nominal capital, that a company is legally allowed to issue to shareholders.

Bonus Shares

Shares issued to existing shareholders free of charge, financed from sources like share premium, retained profits, or general reserves.

Current Ratio

A liquidity ratio calculated as $\frac{\text{Current Assets}}{\text{Current Liabilities}}$ which measures the ability of an enterprise to meet its short-term maturing obligations.