BA 101

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  1. accounting
    summary and analysis of a firm's financial condition
  2. public accountants
    accountants who provide accounting services for a variety of firms for a fee
  3. certified public accountants (CPAs)
    accountants who meet specific educational requirements and pass a national examination
  4. bookkeeping
    the recording of a firm's financial transaction
  5. financial accounting
    accounting performed for reporting purposes
  6. managerial accounting
    accounting performed to provide information to help managers of a firm make decisions
  7. auditing
    an assessment of the records that were used to prepare a firm's financial statements
  8. internal auditors
    specialize in evaluating various divisions of a business to ensure that they are operating efficiently
  9. income statement
    indicates the revenue, costs, and earnings of a firm over a period of time
  10. balance sheet
    reports the book value of all assets, liabilities, and owner's equity of a firm at a given point in time
  11. net sales
    total sales adjusted for any discounts
  12. cost of goods sold
    the cost of materials used to produce the goods that were sold
  13. gross profit
    net sales minus the cost of goods sold
  14. operating expenses
    composed of selling expenses and general and administrative expenses
  15. earnings before interest and taxes (EBIT)
    gross profit minus operating expenses
  16. earnings before taxes
    earnings before interest and taxes minus interest expenses
  17. net income (earnings after taxes)
    earnings before taxes minus taxes
  18. asset
    anything owned by a firm
  19. liability
    anything owed by a firm
  20. basic accounting equation
    assets = liabilities + owners equity
  21. current assets
    assets that will be converted into cash within one year
  22. fixed assets
    assets that will be used by a firm for more than one year
  23. depreciation
    a reduction in the value of fixed assets to reflect deterioration in the assets over time
  24. accounts payable
    money owed by a firm for the purchase of materials
  25. notes payable
    short-term loans to a firm made by creditors such as banks
  26. owner's equity
    includes tha par (or stated) value of all common stock issued, additional paid-in capital, and retained earnings
  27. ratio analysis
    an evaluation of the relationships between financial statement variable
  28. liquidity
    a firm's ability to meet short-term obligations
  29. debt-to-equity ratio
    the measure of the amount of longterm financing provided by debt relative to equity
  30. times interest earned ratio
    measures the ability of a firm to cover its interest payments
  31. net profit margin
    a measure of a net income as a percentage of sales
  32. return on assets (ROA)
    measure's a firm's net income as a percentage of the total amount of assets utilized by the firm
  33. return on equity (ROE)
    measures the return to the common stockholders (net income) as a percentage of their investment in the firm; earnings as a proportion of the firm's equity
Card Set
BA 101
Accounting & Financial Analysis
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