Financial and Managerial Accounting
A current asset is defined by what time period? - ✔✔Less than 12 months
A non-current asset is defined by what time period - ✔✔More than 12 months
Account Receivable - ✔✔an amount that is owed to the business, usually by one of its customers, as a
result of the ordinary extension of credit. (i.e., customer electric bill)
Accounting - ✔✔The information system that measures business activities, processes the information
into reports, and communicates the results to decision makers
Accounting Equation - ✔✔The basic tool of accounting, measuring the resources of the business (what
the business owns or has control of)and the claims to those resources (what the business owes to
creditors and to the owners). Assets = Liabilities + Equity.
Accounting Period - ✔✔The period of time covered by one income statement
Accounts Payable - ✔✔A current liability. Amounts that the company owes to its suppliers.
Accounts Payable - ✔✔A short-term liability that will be paid in the future
Accounts Receivable - ✔✔The right to receive cash in the future from customers for goods sold of for
services performed.
Accrual accounting - ✔✔Accounting for revenues and expenses, as well as for cash receipts and cash
payments
Accrued Liabilities - ✔✔Amounts owed to employees and others for services they have provided but for
which they have not paid.
,Accrued liabilities - ✔✔Liabilities for expenses incurred by not yet paid
Accumulated Depreciation - ✔✔A portion of the cost of this asset has been subtracted from its original
cost because it has been used up.
Advances from Customers - ✔✔Obligation liability. When customers pay in advance of services or
delivery of a product (e.g., magazines)
Allowance for Doubtful Accounts - ✔✔Records the estimated amount of bad debts as an increase in this
account. Also called a contra-asset account, because it is subtracted from the asset, Accounts
Receivable.
Dr. Bad Debt Expense (increase in expense = decrease in equity)
Cr. Allowance for Doubtful Accounts
Asset Measurement Concept - ✔✔If reliable information is available, the amount an asset is measured
at its fair value. Otherwise, the measurement is based on its cost.
Assets - ✔✔Economic resources that are expected to benefit the business in the future. Something the
business owns or has control of.
Audit - ✔✔An examination of a company's financial statements and records.
Bad Debt - ✔✔If some customers do not pay
Balance Sheet - ✔✔Reports on the assets, liabilities, and stockholder's equity of the business as of a
specific date.
Bank Loan Payable - ✔✔Reported separately from accounts payable because debt is evidenced by
promissory note.
Calendar year - ✔✔December 31
, Cash Accounting - ✔✔Keeping track only of cash receipts and cash payments
Cash and cash equivalents - ✔✔Investments in safe, very short-term funds, such as money market funds
Certified Management Accountants (CMAs) - ✔✔Certified professionals who specialize in accounting
and financial management knowledge. They typically work for a single company.
Certified Public Accountants (CPAs) - ✔✔Licensed professional accountants who serve the general
public.
Common Stock - ✔✔Represents the basic ownership of a corporation.
Companies that are in the "further development" stage can use what type of accounting? - ✔✔Local
accounting & managerial accounting
Conservatism Concept - ✔✔governs both when and how much revenue is recognized
Conservatism Concept - ✔✔When a sale is uncertain and revenue cannot be recognized until delivery of
goods or service occurs. To be conservative, decreases in equity should recognized as soon as they
probably occur
Contributed Capital - ✔✔Owner contributions to a corporation.
Corporation - ✔✔A business organized under state law that is a separate legal entity.
Cost and management accounting is concerned with providing management information concerning
what? - ✔✔1. Planning
2. Control
3. Making decisions
A current asset is defined by what time period? - ✔✔Less than 12 months
A non-current asset is defined by what time period - ✔✔More than 12 months
Account Receivable - ✔✔an amount that is owed to the business, usually by one of its customers, as a
result of the ordinary extension of credit. (i.e., customer electric bill)
Accounting - ✔✔The information system that measures business activities, processes the information
into reports, and communicates the results to decision makers
Accounting Equation - ✔✔The basic tool of accounting, measuring the resources of the business (what
the business owns or has control of)and the claims to those resources (what the business owes to
creditors and to the owners). Assets = Liabilities + Equity.
Accounting Period - ✔✔The period of time covered by one income statement
Accounts Payable - ✔✔A current liability. Amounts that the company owes to its suppliers.
Accounts Payable - ✔✔A short-term liability that will be paid in the future
Accounts Receivable - ✔✔The right to receive cash in the future from customers for goods sold of for
services performed.
Accrual accounting - ✔✔Accounting for revenues and expenses, as well as for cash receipts and cash
payments
Accrued Liabilities - ✔✔Amounts owed to employees and others for services they have provided but for
which they have not paid.
,Accrued liabilities - ✔✔Liabilities for expenses incurred by not yet paid
Accumulated Depreciation - ✔✔A portion of the cost of this asset has been subtracted from its original
cost because it has been used up.
Advances from Customers - ✔✔Obligation liability. When customers pay in advance of services or
delivery of a product (e.g., magazines)
Allowance for Doubtful Accounts - ✔✔Records the estimated amount of bad debts as an increase in this
account. Also called a contra-asset account, because it is subtracted from the asset, Accounts
Receivable.
Dr. Bad Debt Expense (increase in expense = decrease in equity)
Cr. Allowance for Doubtful Accounts
Asset Measurement Concept - ✔✔If reliable information is available, the amount an asset is measured
at its fair value. Otherwise, the measurement is based on its cost.
Assets - ✔✔Economic resources that are expected to benefit the business in the future. Something the
business owns or has control of.
Audit - ✔✔An examination of a company's financial statements and records.
Bad Debt - ✔✔If some customers do not pay
Balance Sheet - ✔✔Reports on the assets, liabilities, and stockholder's equity of the business as of a
specific date.
Bank Loan Payable - ✔✔Reported separately from accounts payable because debt is evidenced by
promissory note.
Calendar year - ✔✔December 31
, Cash Accounting - ✔✔Keeping track only of cash receipts and cash payments
Cash and cash equivalents - ✔✔Investments in safe, very short-term funds, such as money market funds
Certified Management Accountants (CMAs) - ✔✔Certified professionals who specialize in accounting
and financial management knowledge. They typically work for a single company.
Certified Public Accountants (CPAs) - ✔✔Licensed professional accountants who serve the general
public.
Common Stock - ✔✔Represents the basic ownership of a corporation.
Companies that are in the "further development" stage can use what type of accounting? - ✔✔Local
accounting & managerial accounting
Conservatism Concept - ✔✔governs both when and how much revenue is recognized
Conservatism Concept - ✔✔When a sale is uncertain and revenue cannot be recognized until delivery of
goods or service occurs. To be conservative, decreases in equity should recognized as soon as they
probably occur
Contributed Capital - ✔✔Owner contributions to a corporation.
Corporation - ✔✔A business organized under state law that is a separate legal entity.
Cost and management accounting is concerned with providing management information concerning
what? - ✔✔1. Planning
2. Control
3. Making decisions
