Financial Accounting

  1. Accounting
    • The systematic presentation and interpretation of financial information.
    • Two type: managerial and financial
  2. Financial Statements
    • There are three types:
    • Balance sheet 
    • Income Statement 
    • Cask flow
  3. Balance Sheet
    A formal statement of the assets, liabilities, and equity for one day.
  4. Income Statement
    A formal statement of the Revenue, Cost of Operations, and expenses over a period of time
  5. Cash Flow
    The formal statement of the sources and uses of cash from operations, investments,and financial activities over a period of time.
  6. Cash Flow Statement
    • Operations= doing our thing. This is usually defined by the name of the company. For example: Overnight auto service would have operations of autoservice . Cash effect on revenue and expenses in the Income statement 
    • Investment- Making cash on your own cash. Getting back a dividend.
    • Financial -Using other people money or money that is borrowed.( e.f. like from the bank, the government, and family)
  7. Asset
    Valuable item owned by a business
  8. Liability
    Money that is owed.Claims of creditors on assets
  9. Equity
    Owners of the business . Included profit from operations and owners investment in the busines
  10. Dividend
    Part of earnings given out to stockholders.
  11. The accounting equation
    Assets= liabilities + Equity
  12. Low leverage
    Equity is high and liabilities are low
  13. High leverage
    Liabilities are high and Equity is low
  14. Revenue
    • selling what you are in business to sell 
    • The money that is made from operations.
    • Increase in equity from operations
  15. Merchandise
    Anything bought to be resold for profit
  16. Expense
    • Necessary cost of operations
    • Decrease in equity from cost of operations
  17. Net income
    • Take homes pay:
    • revenue minus expenses
Card Set
Financial Accounting
BUS 101 first exam