WorldatWork Course on Accounting and Financial Analysis

This set of flashcards covers key terms and concepts from the WorldatWork course on accounting and financial analysis relevant to human resources.

WorldatWork®

The leading nonprofit professional association focused on compensation and total rewards.

Total Rewards Programs

Programs designed to cultivate engaged and effective workforces in organizations.

Generally Accepted Accounting Principles (GAAP)

A set of rules and standards for financial reporting and accounting practices.

Financial Accounting Standards Board (FASB)

The organization responsible for establishing GAAP in the United States.

Income Statement

A financial statement that summarizes revenue and expenses over a specific time period.

Balance Sheet

A snapshot of a company's assets, liabilities, and equity at a specific point in time.

Double Entry Accounting

An accounting method that maintains balance between credits and debits in financial transactions.

Liquidity Measures

Financial ratios that assess an organization's ability to meet short-term financial obligations.

Debt-to-Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

Gross Margin

The difference between sales and the cost of goods sold, representing the portion of sales revenue that exceeds the cost of goods sold.

Return on Assets (ROA)

A financial ratio that shows the percentage of profit a company earns in relation to its overall resources.

Compensation and Benefits Costs

Expenses related to employee pay and benefits provided to them by their employer.

Cash Flow Statement

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives.

Retained Earnings

Cumulative amount of net income retained by a company, not paid out as dividends to shareholders.

Equity Financing

Raising capital through the sale of shares in the business.

Debt Financing

Borrowing funds to be paid back with interest.

Incentive Pay

Compensation tied to performance or results within a business.

Mandatory Benefits

Benefits required by law or regulation, such as Social Security and unemployment insurance.

Deferred Taxes

Taxes that are assessed but not yet paid, typically occurring due to timing differences between accounting and tax reporting.

Human Resources (HR)

The department within an organization focused on recruiting, hiring, training, and managing employee relations.