Chapter 1 Book Notes

Accounting 100 with Rittenberg at University of Wisconsin - Madison

About this deck

By: Sophie Hillman
Textbook:

Financial Accounting: Tools for Business Decision Making
Created: 2008-12-02
Size: 24 flashcards
Views: 14

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Internal Users

managers who plan, organize, and run a business.

External Users

investors use accounting info to make decisions to buy, hold, or sell stock. Creditors use accounting info to evaluate risks of granting credit or lending money. Also tax authorities.

Financial Accounting

provides economic and financial info for investors, creditors, and other external users.

Monetary unit assumption

requires that only transaction data that can be expressed in terms of money be included in accounting records.

economic entity assumptions

- can be any organization or unit in society. Requires that the activities of the entity be kept separate and distinct from the activities of its owner and all other economic entities.

-Proprietorship

a business owned by one person

Partnership

a business owned by 2 or more persons associated as partners.

Corporation

ownership divided into transferable shares of stock.

Assets

resourced owned by a business.

Liabilities

existing debts and obligations.

-Creditors

All of the persons to whom an enterprise owes money by a specific point in time.

Stockholder?s Equity

ownership claim on total assets

Revenues

gross increases in stockholder?s equity resulting from business activities entered into for the purpose of earning income.

Expenses

decreases in stockholder?s equity that result from operating the business

Dividends

the distribution of cash or assets to stockholders.

Accounting information system

keeps track of the results of each of the various business activities.

Financing Activities-

it takes money to make money

Investing Activities

once the company has raised money through financing activities, it will then use that money in investing activities

Operating Activities

once a business has the assets it needs to get started, it can begin its operations.

Accounts Receivable

the right to receive money in the future from a customer

Balance Sheet-

presents a picture at a point in time of what the business owns and what it owes

Income Statement-

shows how successfully your business performed during a period of time-reports revenues and expenses

Retained Earnings Statement

- indicates how previous income was distributed in the form of dividends and how much was retained in the business to allow for the future growth

Statement of Cash Flows

shows from what sources the business obtained cash and how the cash was used during a period of time

About this deck

By: Sophie Hillman
Textbook:

Financial Accounting: Tools for Business Decision Making
Created: 2008-12-02
Size: 24 flashcards
Views: 14

About StudyBlue

“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy