Wall Street Prep Accounting Latest 2023 Rated A+

Wall Street Prep Accounting Latest 2023 Rated A+ FASB Financial Accounting Standards Board, which oversees GAAP through issuance of SFAS, oversight by the SEC SFAS Standard Financial Accounting Statements, issued by the FASB AA,P,C: Accounting Entity The assumption that a corporation is an entity separate from any person AA,P,C: Going Concern The Assumption that a corporation will continue to exist for the foreseeable future AA,P,C: Measurement & Units The principle that financial statements can only show the quantifiable assets or liabilities of a corporation AA,P,C: Periodicity the principle that financial statements reflect a standard period of time, usually years or quarters AA,P,C: Historical Cost The principle that resources and liabilities are recorded at their initial cost rather than a continuously updating value AA,P,C: Revenue Recognition The principle that revenues are recorded when EARNED and MEASURABLE AA,P,C: Matching The principle that costs must be recorded in the same period that revenues were generated AA,P,C: Disclosure The principle that a corporation must reveal all relevant financial information AA,P,C: Estimates and Judgement The constraint that estimates/predictions cannot always be accurate AA,P,C: Materiality The constraint that one transaction may be deemed relevant for one company but not another, usually based on size AA,P,C: Consistency The constraint that recording methods and assumptions may not always be the same over time AA,P,C: Conservatism The constraint that assets are usually understated and liabilities are not understated, for example historical cost measurements Income Statement depicts the revenues and expenses of a company over a given time period Revenue proceeds from the goods or services offered for sale by a company Cost of Goods Sold Represents the cost of manufacture or procurement for goods or services that generate revenue (cost of inventory, factory overhead, raw materials, direct labor costs, depreciation of fixed assets) Gross Profit Revenue-Cost of Goods Sold, i.e. profit only after direct expenses have been calculated Selling, General and Administrative Expenses costs not directly associated with manufacture or procurement of revenue driving goods or services Research and Development Expenses costs associated with developing new products or procedures Depreciation a portion of the expense incurred by purchasing revenue generating assets such as equipment. quantifies "wear and tear" Amortization The allocation of the cost of intangible assets over the useful life of the asset Non-Operating income and expenses the income or costs incurred by things not directly to the operations of the business Interest Expense expenses incurred by payment on outstanding debts Interest income income generated by interest paid on stocks, bonds, savings accounts, etc. EBITDA Earnings before interest, taxes, depreciation and amortization Balance Sheet identifies a companies resources and how they're funded (liabilities and equity) at a particular date and time Asset properties must be owned, of value, and quantifiable Cash money held by a firm in an account Marketable Securities debt or equity securities held by a company Accounts receivable payments owed to a company for goods and services already provided but not paid for Inventories goods waiting to be sold Prepaid expenses prepaid rights to future goods or services that are counted as assets Property, Plants and Equipment land, buildings and machinery Intangible Assets and Goodwill nonphysical assets, including patents and trademarks that have been acquired Accounts Payable liability that represents obligations for unpaid bills on goods or services Accrued Expenses liability that has not been paid out yet, i.e. employee compensation, bonuses Short Term Debt debt due within 12 months Long Term Debt debt that isn't due for at least 12 months Common Stock represents capital received through issuing shares of common stock Retained Earnings the earnings that have not been paid out in the form of dividends Treasury Stock bought back stock that has been taken out of circulation Preferred Stock equity issued with special rights, takes priority over common stock Double Entry Accounting the idea that every transaction is recorded as both a credit and debit Debit Increases in Assets or decreases in equity or liability Credit Decreases in assets or increases in liabilities or equities Link between income statement and balance sheet retained earnings Goodwill the amount by which the purchase price for a company exceeds its fair market value, representing the value of its brand name, reputation, employee morale, etc. Capital Lease A lease that is counted as a liability with the corresponding asset as a PP&E Operating Lease No asset or liability is recorded, payments are simply expensed on the income statement.