D196- Principles of Financial and Managerial Accounting

D196- Principles of Financial and Managerial Accounting 32 studiers today 4.4 (47 reviews) Students also studied Terms in this set (206) Western Governors UniversityD 072 Save Test Prep - WGU - Principles of Man...105 terms C_BondePreview

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Teacher 112 terms Carolyn_Nyawira Preview D196 Pr 207 term jour bookkeepingday to day keeping of transcations steps of decision makingidentify issue gather information identify alternatives select option that most likely results in desired objective accountinganalysis of events record and report financial effects of business activities where does capital come from (3)investors creditors(lenders) business itself (from earnings retained)

• main types of accountingfinancial and managerial

managerial accountinggather and analysis of information for internal use and decision making.financial accountinggather, report, analysis of information for external users- investors and creditors.summary of a business what does managerial accounting reviewproduct cost, breakeven analysis, budgeting, performance analysis, outsource production what does financial accounting reviewcredit analysis, financial health, estimate value of the company examples of external financial reports for financial accounting annual report, financial statement, balance sheet, income statement, statement of cash flow

balance sheetreports assets and liabilities. basic.list as of a point in time. as of today, as of yesterday income statementhow much did you ,ake period of time - from nov to jan statement of cash flowwhere did the cash come from and where did the cash go period of time - from nov to jan lenderlends money with intend to get it back plus interest. need current income, existing obligations, existing assets, payroll stub, tax return, monthly payments, bank stmts investorbuys into your company. looks at if the business is profitable, what they are buying, buying obligations, potential future projections what forms will the manager of a business useboth financial and managerial fasb- what does it stand for, who are they and what do they do financial accounting standards board private group, not govt agency, no legal authority, conducted of people from a variety of business related backgrounds.establishes financial accounting and reporting standards for private sector companies

• of the two boards that make up GAAP

gasb- what does it stand for, who are they, what do they do governmental accounting standards board sets accounting and financial reporting standards for state and legal governments.authority over financial reporting by government entities

• of the two boards that make up GAAP

gaapgenerally accepted accounting principles secSecurities and Exchange Commission regulates us stock exchange. provides investors with full and fair information about publicly traded companies.legal punishment iasbInternational Accounting Standards Board develop international accounting standards. made up of members from many countries aicpaamerican institute of certified public accountants administers the cpa exam.enforces professional sanction by taking away cpa license when acted unethically.role and purpose of accountingaccumulate and report on financial information about performance, financial position, cash flow of a business. used to reach decisions about how to manage the business, invest in it, or lend money to it what is a balance sheetstatement of what they have and how they financed it at a specific point in time.

balance sheet equationassets = liabilities + owners equity what are assets and exampleswhat they own or control that will provide probable future benefits cash, accts receivable, inventory, buildings, land.what are liabilities and exampleswhat we owe. obligations that require future sacrifice.phone bill, car loan, accts payable, fed and state govt tax, mortgage, unearned revenue what is owners equity and examplesowners share, stockholders equity, how much owner originally invested in business + how much profit they have left capital stock- amt given by shareholders to obtain shares of stock(capital=$ so money from stocks) retained earnings- earnings retained in business, ex= net income do dividends increase or decrease owners equity decrease does investments by owners increase or decrease owners equity increase what is an income stmtanalyzes economic performance for a specific period of time. statement of income. revenues, expenses, liabilities.equation for net incomenet income= revenues - expenses does revenues increase or decrease net assets increase does expenses increase or decrease net assets decrease what is revenueamount of assets created from sale.products, membership, software, hardware, etc what are expensesamount of assets consumed in generating revenues.wages, utilities, wholesale cost if revenue exceeds expenses what happensyou get net income if revenue is less than expenses paid, what happens net loss how to find net income or net lossrevenue- expenses= if + net income, if - net loss gross profit and lossdifference between sales and cost of good sold. retail price-wholesale cost to buy.sales- cost of goods operating income and equationday to day basis sales- cost of goods sold- operating expenses non operating expensesinterest and income taxes no connection with specific nature operating business

EPS definition and equationearnings per share net income/ outstanding number of shares of stock gainsmaking money from activity outside natural activities of busines statement of cash flowhow cash changed from beginning to end and why cash in(receipts) and cash out(payments) from operating, investing, financing operational activity; inflow and outflowday to day activities operation cash inflow selling goods, providing services, operation cash outflow wages, utilities tax investing activity; inflow and outflowinflow selling buildings, selling land outflow buying buildings and land financial activity; inflow and outflowinflow borrowing $, receiving investments from owners outflow repaying loan, dividends, cash inflowreceiving cash investments form owners, cash from bank when borrowing $, cash from customers, cash from sale of old machines, buildings, etc cash outflowpaying to buy new machines, buildings, paying employee wages, suppliers for inventory purchases, interst on loans, principal on loans, dividends stmt of retained earningsaccumulated profit and loss since business started. links income stmt and balance sheet together. from one accounting period to the next.beg. retained earnings + net income for period - dividends paid during what does sec domonitors securities market and financial disclosures form 10k, what is it, where is it found, how often annual filing, tells what the business does and products and services sold/offered, risk of company, properties owned, legal proceedings, mngmt discussion fo how company is doing and future outlook, financial stmts, file w/i 60 days of fiscal year sec website form 10qquarterly unaudited financial reports covering the most current quarter filed quarterly cik- what does it stand for and what is itcentral index key unique indentifying number for each company in sec EDGAR system when looking at a balance sheet, what is used for property, current market value or original market value original market value current vs long term formatcurrent typically = within a year long term typically = more than a year what is a classified balance sheetlist everything by current and long term. current is listed first then long term