UTA Entrance Accounting Exam Flashcards

Flashcards covering key vocabulary and concepts from the lecture notes.

Balance Sheet

The financial statement that reports what the company owns (assets) and what the company owes (liabilities) on a specific date.

Income Statement

Shows how much the business earned during a period of time (revenues less costs).

Statement of Owner's Equity

Shows the activity of shareholder's (owners) during a period of time, including receipt of funds from shareholders and payments back to shareholders in the form of dividends. Also reflects earnings of the business that go to the shareholders

Cash Flow Statement

Shows the source of cash and what the cash was used for during a period of time. (Operating, Investing, and Financing Activities)

Retained Earnings

The amount of cumulative profits and losses kept by the company since the first day of operations. Calculated as: Beginning Retained Earnings + Net Income (or - Net Loss) - Dividends paid = Ending Retained Earnings

Operating Activities

Cash flow activities directly related to earnings from day to day business operations. (Net income, current assets, and current liabilities (less than 1 year))

Investing Activities

Cash flow activities directly related to buying and selling assets used long term in the business (use more than 1 year).

Financing Activities

Cash flow activities directly related to borrowing and repaying debt and receipts and payments from/to owners (pay later than 1 year).

Assets

Company's economic resources to operate a business. They provide a probable future economic benefit owned or controlled by the company resulting from a past transaction.

Liabilities

The company's debts and obligations which represent the probable use of a future economic benefit (an asset) owed resulting from a past transaction.

Stockholder's Equity

Earnings kept in the company / financing provided by the owners. It equals owners’ contributions to the company less dividends paid to owners plus profits and less losses (net income). Also equal to total assets less total liabilities

Revenues

Earned from providing goods or services in exchange for an asset. This is the amount the customer is expected to pay for the goods or services they received.

Expenses

Using an asset of the company to provide goods or services. What it costs the company to provide the goods or services to the customer.

Accounting Equation

Assets = Liabilities + Stockholders' Equity

FASB

Financial Accounting Standards Board, is the primary accounting standards setting authority in the US.

IASB

International Accounting Standards Board, is the primary accounting standards setting authority for several countries outside of the US.

SEC

Securities and Exchange Commission, is the government agency that oversees US financial markets and accounting standards for public companies.

Accrued Expenses

An account representing all unpaid financial obligations incurred by the organization; a liability.

Audit

An examination of accounting records to determine if the records and reports are in accordance with generally accepted accounting standards.