Financial Accounting Concepts

Vocabulary flashcards covering core accounting terms, financial statements, equations, and regulatory rules from the lecture transcript.

Financing Activities

Transactions with investors and creditors, such as issuing stock and borrowing or repaying loans.

Investing Activities

Acquiring long-term resources, including buying equipment, property, or stock in another company.

Operating Activities

Day-to-day revenue and expense activities, such as sales, salaries, utilities, and taxes.

Accounting Equation

The mathematical relationship expressed as $\text{Assets} = \text{Liabilities} + \text{Stockholders' Equity}$.

Assets

What the company owns.

Liabilities

What the company owes.

Stockholders' Equity

The owners' claim on assets, representing the part not financed by debt.

Income Statement

A financial statement measuring profitability over a period using the formula $\text{Revenue} - \text{Expenses} = \text{Net Income}$.

Statement of Stockholders' Equity

A financial statement detailing changes in equity over a period, calculated using $\text{BB Common Stock} + \text{New Issuances} = \text{EB Common Stock}$ and $\text{BB Retained Earnings} + \text{Net Income} - \text{Dividends} = \text{EB Retained Earnings}$.

Balance Sheet

A financial statement reporting financial position at a point in time following the formula $\text{Assets} = \text{Liabilities} + \text{Stockholders' Equity}$.

Statement of Cash Flows

A financial statement tracking cash coming in and going out over a period by Operating, Investing, and Financing activities, following $\text{Operating CF} + \text{Investing CF} + \text{Financing CF} = \text{Change in Cash}$.

Dividends

A cash distribution to stockholders that reduces Retained Earnings directly and is not a business expense or included on the income statement.

GAAP

Generally Accepted Accounting Principles, which are the rules of financial accounting.

FASB

Financial Accounting Standards Board, the independent private body that sets GAAP.

Form 10-Q

The quarterly filing submitted by public companies.

Form 10-K

The annual filing submitted by public companies.

Fiscal Year

Any 12-month reporting period that does not end on December 31.

Calendar Year

A reporting period that ends on December 31.