39895097
Description
Flashcards by BRANDI MCCAMMON, updated 2 months ago
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Created by BRANDI MCCAMMON
2 months ago
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| Question | Answer |
| Accounts Payable | Amounts owed to creditors for services or items purchased |
| Accounts Receivable | Amounts owed by customers to a business from previous sales |
| Acid Test | Current assets less inventory less prepaid expenses divided by current liabilites |
| Asset turnover | Net sales divided by total assets |
| Assets | Things of value owned by a business |
| Average day's collection | Number of days to collect your receivables |
| Balance sheet | Financial repot that lists assets, liabilities, and equity. Report reflects the financial position of the company as of a particular date |
| Capital | Owners' investment in the business |
| Common Stock | Units of ownership called shares |
| Comparative statement | Statement showing date from two or more periods side by side |
| Corporation | Company with many owners or stock-holders. equity of these owners is called stock-holders equity |
| Cost of merchandise (goods) sold | Beginning inventory + Net purchases - Ending inventory |
| Current assets | Assets that are used up or converted into cash within 1 year or operating cycle |
| Current liabilities | Debts or obligations of the company that are due within 1 year |
| Current ratio | Current assets divided by current liabilites |
| Expenses | Cost of doing business; found on the income statement |
| Gross Profit from sales | Net sales - Cost of goods sold |
| Gross sales | Total earned sales before sales returns and allowances or sales discounts |
| Horizontal analysis | Method of analyzing financial reports where each total this period is compared by amount of percent to the same total last period |
| Income statement | Financial report that lists the revenues and expenses for a specific period of time. It reflects how well the company is preforming |
| Liabilities | Amounts business owes to creditors |
| Long-term Liabilities | Debts or obligations that company does not have to pay within 1 year |
| Merchandise Inventory | Cost of goods for resale |
| Mortgage note payable | Debt owed on a building that is a long-term liability; often the building is the collateral |
| Net Income | Gross profit less operating expenses |
| Net purchases | Purchases - Purchase discounts - Purchase returns and allowances |
| Net sales | Gross sales - Sales discounts - Sales returns and allowances |
| Operating expenses | Regular expenses of doing business. These are not costs |
| Owner's equity | The portion of a company's assets that an owner can claim |
| Partnership | Business with two or more owners |
| Plant and equipment | Assets that will last longer than 1 year |
| Prepaid expenses | Items a company buys that have not been used are shown as assets |
| Profit margin on net sales | Amount of net income as a percent of net sales |
| Purchase discounts | Savings received by buyer for paying for merchandise before a certain date |
| Purchase returns and allowances | Cost of merchandise returned to store due to damage defects and so on. An allowance is a cost reductions that results when buyer keeps or buys damaged goods |
| Purchases | Merchandise for resale; found on the income statement |
| Quick assets | Current assets - Inventory - Prepaid expenses |
| Quick ratio | (Current assets - Inventory - Prepaid expenses) / Current liabilities |
| Ratio analysis | Relationship of one number to another |
| Retained earnings | Amount of earnings kept in the business |
| Return on equity | Net income divided by stockholders' equity |
| Revenues | Total earned sales (cash or credit) less any sales discounts, returns or allowances |
| Salaries payable | Obligations that a company must pay within 1 year for salaries earned but unpaid |
| Sales (not trade) discounts | Reductions in selling pice of goods due to early customer payment |
| Sales returns and allowances | Reductions in price or reductions in revenue due to good returned because of product defects errors and so on. when the buyer keeps the damages goods an allowance results |
| Sole proprietorship | A business owned by one person |
| Stockholders' equity | Assets less liabilites |
| Total debt to total assets | Amount of debt as a percent of total assets |
| Trend analysis | Analyzing each number as a percentage of a base year |
| Vertical analysis | Method of analyzing financial reports where each total is compared to one total |
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