WGU C213 Accounting for Decision Makers

WGU C213 Accounting for Decision Makers Leave the first rating Students also studied Terms in this set (482) Social SciencesEconomics Finance Save WGU C214 Concepts Only Multi Cho...Teacher 222 terms Lydia_Smith75 Preview C213 WGU OA Prep 208 terms Skylar_Weible Preview WGU C213 Accounting for Decision ...82 terms Cait_Blankenship Preview C213 Ac 204 term don AccountingA system of providing "quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions." Accounting EquationAssets = Liabilities + Owners' Equity Accounts PayableThe flip side of accounts receivable—when one company sells on credit, creating for itself an account receivable, the company on the other side of the transaction is buying on credit, creating an account payable.Accounts ReceivableAmounts owed to a business by its credit customers and are usually collected in cash within 10 to 60 days.Accrual AccountingThe process that accountants use in adjusting raw transaction data into refined measures of a firm's economic performance.Accumulated DepreciationReflects the wear and tear, or depreciation, of these items since they were originally purchased.Accumulated Other Comprehensive IncomeThe grouped together and reported changes which companies experience increases and decreases in equity each year because of the movement of market prices or exchange rates Activity-based Costing (ABC)A method of attributing overhead costs to products based on measurable factors that relate to activities that create overhead costs.Additional Paid-in CapitalInvested by stockholders that exceeds the par value of the issued shares.

American Institute of Certified Public Accountants

(AICPA)

The professional organization of certified public accountants in the United States.AssetProbable future economic benefit obtained or controlled by a particular entity as a result of past transactions or events.Asset MixThe proportion of total assets in each asset category, is determined to a large degree by the industry in which the company operates.Asset TurnoverSales divided by assets and is interpreted as the number of dollars in sales generated by each dollar of assets.AssetsAssets are the firm's economic resources, formally defined as "probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events Assets-to-equity RatioAssets divided by equity and is interpreted as the number of dollars of assets acquired for each dollar invested by stockholders.Audit CommitteeMembers of a company's board of directors who are responsible for dealing with the external and internal auditors.Average Collection PeriodShows the average number of days that elapse between sale and cash collection.Balance SheetA listing of an organization's assets and of its liabilities at a certain time.Batch-level ActivitiesActivities that take place in order to support a batch or production run, regardless of the size of the batch. (starting & stopping, small productions runs = higher cost even if the total amount produced stays the same) Book ValueThe book value of an asset is the asset's cost minus the asset's accumulated depreciation.BookkeepingThe preservation of a systematic, quantitative record of an activity.Break-even PointThe amount of sales at which total costs of the number of units sold equal total revenues; the point at which there is no profit or loss.Capital BudgetingSystematic planning for long-term investments in operating assets.Capital Lease ObligationsA long-term liability in the balance sheet.CashCoins and currency as well as the balances in company checking and savings accounts.Cash BudgetAn important tool in helping management plan its cash needs.Cash EquivalentsShort-term, highly liquid investments such as Treasury bills, commercial paper, and money market funds.

Cash Flow Adequacy RatioCash from operations divided by expenditures for fixed asset additions and acquisitions of new businesses Cash Times Interest Earned RatioA financial analysis tool that indicates the interest payment ability of an entity Certified Public AccountantA person who has taken a minimum number of college-level accounting classes, has passed the dreaded CPA exam, and has met other requirements set by his or her state.Common StockStockholders' equity investment Common-size Financial StatementsAll amounts for a given year being shown as a percentage of that denominator for the year.ComparabilityTnformation that becomes much more useful when it can be related to a benchmark or standard Comprehensive IncomeThe number used to reflect an overall measure of the change in a company's wealth during the period Conservatisma pervasive factor in accounting, can be summarized as follows: When in doubt, recognize all losses but don't recognize any gains.ConsistencyThe consistency principle states that, once you adopt an accounting principle or method, continue to follow it consistently in future accounting periods.Contribution MarginThe difference between total sales and variable costs; the portion of sales revenue available to cover fixed costs and provide a profit.Contribution Margin RatioThe percentage of net sales revenue left after variable costs are deducted; the contribution margin divided by net sales revenue.Control ActivitiesPolicies and procedures used by management to meet their objectives.Control EnvironmentThe actions, policies, and procedures that reflect the overall attitudes of top management about control and its importance to the entity.Control ProceduresPolicies and procedures used by management to meet their objectives.ControllingImplementing management plans and identifying how plans compare with actual performance.Cost BehaviorThe way a cost is affected by changes in activity levels.Cost DriversNumerical measure used to reflect the amount of a specific cost that is associated with a particular activity.Cost PoolTotal cost being generated by a specific overhead cost activity.

Cost of Goods SoldWhen a business sells goods to customers, the cost of the goods sold is recorded as an expense Cost-volume-profit (C-V-P) AnalysisTechniques for determining how changes in revenues, costs, and level of activity affect the profitability of an organization.Current AssetsCash, accounts receivable, and inventory.Current LiabilitiesThose obligations expected to be paid within one year, the most common being accounts payable.Current Portion of Long-term DebtSome liabilities, such as mortgages, are payable in equal monthly installments over a specified number of years. The portion of these liabilities that is payable within 12 months from the balance sheet date.Current RatioA comparison of current assets (cash, receivables, and inventory) with current liabilities. It is computed by dividing total current assets by total current liabilities.Debt RatioA frequently used measure of leverage, computed as total liabilities divided by total assets.Debt-to-equity RatioTotal liabilities divided by total equity and is interpreted as the number of dollars of borrowing for each dollar of equity investment Deferred Income Tax LiabilityThe income tax expected to be paid in future years on income that has already been reported in the income statement but which, because of the tax law, has not yet been taxed.DerivativeA financial instrument, such as an option or a future, that derives its value from the movement of a price, an exchange rate, or an interest rate associated with some other item.Detective ControlsInternal control activities that are designed to detect the occurrence of errors and fraud.Differential CostsFuture costs that change as a result of a decision; also called incremental or relevant costs.Direct CostsCosts that are specifically traceable to a unit of business or segment being analyzed.Direct LaborWages paid to those who physically work on direct materials to transform them into a finished product and are traceable to specific products.Direct MaterialsMaterials that become part of the product and are traceable to it.Direct Methodreporting the information contained in the last column of the adjustment worksheet