Wall Street Prep
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1. Assets resources a company uses to operate its business
includes cash, A/R, PP&E
2. Liabilities represents the company's contractual obligations and includes A/P, debt, accrued
expenses
3. Shareholder's eq- is the residual
uity
the value of the business available to the owners (shareholders) after debts have
been paid off
4. Income state- illustrates the profitability of the company over a specified period of time
ment
broad sense: shows revenue-expenses
5. Balance sheet snapshot of the company economic resources and funding for those resources at
a given point in time (A = L + SE)
6. Revenue "top-line"
represents the sale of goods and services
it is recorded when earned (even though cash might not have been received at the
time of transaction)
7. Expenses netted against revenue to arrive at net income
COGS (directly associate with good production), SG&A (indirectly associated with
production), interest expense (expense related to paying debt holders periodic
payments), taxes, depreciation expense (non-cash expense accounting for the use
of PP&E, often imbedded within COGS and SG&A)
8. Net income "bottom-line"
, Wall Street Prep
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revenue-expenses
the profitability available to common shareholder's after debt payments have been
made (interest expense)
9. EPS (earnings per portion of a company's profit allocated to each outstanding share of common
share) stock
EPS = (net income - dividends on preferred stock)/weighted average shares
outstanding
10. Cash flow state- While cash is not necessarily received when a sale occurs, the income statement
ment still records the sale. As a result, the income statement captures all the economic
transactions of the business.
The cash flow statement is needed because the income statement uses what is
called accrual accounting. In accrual accounting, revenues are recorded when
earned regardless of when cash is received (revenue includes sales using cash
and made on credit A/R)
Since we also want to have a clear understanding of the cash position of a
company, we need the statement of cash flows to reconcile the income statement
to cash inflows and outflows.
"cash position of the company"
cash from operating activities, cash from investing activities, and cash from financ-
ing activities
11. Cash from oper- mostly indirect method
ating activities
starts with net income and includes the cash effects of transactions involved in
calculating net income. reconciliation of net income.
Study online at https://quizlet.com/_11zs6y
1. Assets resources a company uses to operate its business
includes cash, A/R, PP&E
2. Liabilities represents the company's contractual obligations and includes A/P, debt, accrued
expenses
3. Shareholder's eq- is the residual
uity
the value of the business available to the owners (shareholders) after debts have
been paid off
4. Income state- illustrates the profitability of the company over a specified period of time
ment
broad sense: shows revenue-expenses
5. Balance sheet snapshot of the company economic resources and funding for those resources at
a given point in time (A = L + SE)
6. Revenue "top-line"
represents the sale of goods and services
it is recorded when earned (even though cash might not have been received at the
time of transaction)
7. Expenses netted against revenue to arrive at net income
COGS (directly associate with good production), SG&A (indirectly associated with
production), interest expense (expense related to paying debt holders periodic
payments), taxes, depreciation expense (non-cash expense accounting for the use
of PP&E, often imbedded within COGS and SG&A)
8. Net income "bottom-line"
, Wall Street Prep
Study online at https://quizlet.com/_11zs6y
revenue-expenses
the profitability available to common shareholder's after debt payments have been
made (interest expense)
9. EPS (earnings per portion of a company's profit allocated to each outstanding share of common
share) stock
EPS = (net income - dividends on preferred stock)/weighted average shares
outstanding
10. Cash flow state- While cash is not necessarily received when a sale occurs, the income statement
ment still records the sale. As a result, the income statement captures all the economic
transactions of the business.
The cash flow statement is needed because the income statement uses what is
called accrual accounting. In accrual accounting, revenues are recorded when
earned regardless of when cash is received (revenue includes sales using cash
and made on credit A/R)
Since we also want to have a clear understanding of the cash position of a
company, we need the statement of cash flows to reconcile the income statement
to cash inflows and outflows.
"cash position of the company"
cash from operating activities, cash from investing activities, and cash from financ-
ing activities
11. Cash from oper- mostly indirect method
ating activities
starts with net income and includes the cash effects of transactions involved in
calculating net income. reconciliation of net income.
