Financial Accounting Principles Lecture Notes

These flashcards cover key vocabulary terms and definitions from financial accounting principles discussed in the lecture notes.

Classified Balance Sheet

A balance sheet that distinguishes between current and non-current assets and liabilities.

Comprehensive Income

Change in equity that results from transactions and other events from nonowner sources.

Multiple-Step Income Statement

An income statement that separates operating revenues and expenses from nonoperating revenues and expenses.

Single-Step Income Statement

An income statement where total expenses are subtracted from total revenues without separating operating and nonoperating categories.

Fair Value

The price to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date.

Revenue Recognition

The process of recognizing revenue when a performance obligation is satisfied, either over time or at a point in time.

Deferred Revenue

Cash received before the performance obligation is met.

Asset Retirement Obligation (ARO)

A legal obligation associated with the retirement of a tangible long-lived asset.

Intercompany Transactions

Transactions occurring between related entities, such as parents and subsidiaries, that require elimination entries for consolidated financial statements.

Goodwill in Partnerships

An intangible asset arising when a partner's investment exceeds their share of the net assets.

Temporary Differences

Differences between taxable income and financial income that result in taxable or deductible amounts in future years.

Permanent Differences

Transactions that affect either taxable income or financial income, but not both.

Funding Sources for Not-for-Profit Organizations

Sources such as donations, grants, and member dues that provide financial resources for operations.

Conditional Contributions

Pledges that do not result in revenue recognition until certain conditions are met.

Economic Resources Measurement Focus

A focus that records both current and non-current assets and liabilities.

Modified Accrual Accounting

A basis of accounting where revenues are recognized when measurable and available; expenditures are recognized when fund liabilities are incurred.