F

17.1-17.3 buissness

accounting: language of business where you record, classify, Summarize, interpret systems

accounting cycle: 6 steps for preparation & analysis of the financial statements.

Bookkeeping: record all transactions.

1) analyze documents.

2) make journal

3) make ledger

4) trail balance

5) Financial statement (es., B.S., Soc)

6) analyze financial statements.

trail balance: journal=ledger

Financial statement: all transactions occurred in a specific time.

Balance sheet eq.: Asset = liabilities + Owner equity.

asset: things you own, ex: furniture, land

fixed: more than 1 yr ex.: land, equipment

current: less than 1yr, ex.: cash

Intangible assets: copyright, something that isn't physical (can't be touched)

liquidity: how fast current assets can be converted into cash

liability: what you owe

current liability: less than 1yr ex. ____ payable

Long-term liability: more than 1 yr ex: mortgage, loan

Owner equity: the amount of something that belongs to you before it becomes fully asset.

retained earnings: Profit that you reinvest in a company

Depreciation: a fixed asset that's value increases or decreases

gross profit=rev-cogs

operating income= gross profit-expense

net income= operating-tax

(net income): Rev-expense

Cost of goods sold: how much you spend on the stuff you sold (w/out profit)

expense: is many you spent (rent, wages, salaries, Paid)

revenue: something($) you earn ( ____ earned / recieved / Sold)

gross profit: profit from COGS ex: bottle you buy for 2 (COGS) and sell for 5 Profit is 3 (gross profit)

cash flow: money in and out

Operation: salary taxes interest dividend

investment sale of long term asset

financing: dept