inn会计概念英文名词解释

2021年1月21日发(作者：憎恶)
Session 1 Definitions and Elements of Financial Statements


You will need to learn these underlined terms for the midterm!


I.

Income statement

–

“video” of revenues, expenses, gains, losses
over a period of time

a.

Basic definitions:

Revenue

–
increase in equity (and associated increase in assets
and/or decrease
in
liabilities) earned
from the sale
of goods or
provision
of
services
to
customers;
it
is
measured
on
a
gross
basis
as the amount of assets to be received.


Expense

–

decrease
in
equity
(and
associated
decrease
in
assets
and/or increase in liabilities) created by sale of goods,
rendering
of
services
or
passage
of
time;
it
is
measured
on
a
gross
basis as the amount of assets consumed.


Gain
–
increase in equity resulting from selling assets or
recognizing
the
increase
in
value
of
assets
(or
decrease
in
value
of liabilities); it is measured on a net basis as the positive
difference between current value and amount recorded on the
balance sheet.


Loss
–
decrease in equity resulting from selling assets or
decrease
in
value
of
assets
(or
increase
in
value
of
liabilities);
it is measured on a net basis as the negative difference between
current value and amount recorded on the balance sheet.


Accounting period
- the time period between consecutive balance
sheets
for
which
a
firm
prepares
an
income
statement
and
statement
of
cash
flows
.,
an
annual
report
has
a
12-month
accounting
period
and a quarterly statement has a 3-month accounting period).


b.

Elements:

Sales -
revenue from selling goods or providing services to
customers, which is reported as the top line on the income
statement.


Cost
of
Goods
Sold
or
Cost
of
Sales
labor
,
material,
and
overhead
costs directly related to providing goods or services.



Gross
Profit
is the difference between Sales Revenue and Cost
of
Goods
Sold,
which
represents
the
profit
that
is
available
to
cover
all of the other expenses on the income statement.


Operating
Expenses

are
expenses
related
to
the
ordinary
operating
activities
of
the
firm
of
providing
goods
or
services
to
customers
or gains and losses related to operating assets like PPE.


Operating Profit or Income
equals gross profit minus operating
expenses.






Other Nonoperating Revenue and Expense
are items related to
FINANCING activities ., interest expense) and INVESTING
activities ., interest income and gains and losses on
investments).


Income
Before
Tax

equals
operating
profit
minus
other
income
and
expense.


Tax
expense

equals
a
GAAP
based
measure
of
the
government
charges
on income.


Net Income
equals income before tax minus tax expense.


c.

Income
statement
accounts are
called TEMPORARY ACCOUNTS
because
amounts accumulate for a defined period of time and are then
zeroed
out
when
the
balance
is
transferred
to
retained
earnings.
Annual income statement amounts represent the total revenues or
expenses for a 12 month period called the fiscal year.




II.

Balance sheet

–

“snapshot”

of assets, liabilities, stockholders’
equity at a
point in time

a.

Basic Definitions


Operating cycle
- average time it takes to go from cash to goods
and services sold to customers and then back to cash collected
from customers.

b.

Elements:

Asset
: resource
the
firm
controls
because
of
a
past
transaction
or event that provides expected future benefits.

Current asset:
asset a firm expects to convert to cash,
sell, or consume
within the longer of one year or an
operating cycle.


Noncurrent asset:
asset not classified as current.

Liability:
creditor’s claims or obligation

that represents a
probable future economic sacrifice of assets or services based
on a past transaction or event.

Current
liability
: obligation
a
firm
expects
to
pay
within
the longer of one year or an operating cycle.

Noncurrent liability:
liability

not classified as
current.



Shareholders’ equity
: measure of financing provided by owners
of the firm that captures
owners’

residual claim
on assets of
the firm after satisfying liabilities.


Retained
earnings:
cumulative
net
income
minus
dividends
over the life of the firm.



Retained
earnings
are
a
source
of
financing.
When
earnings
exceed
the
dividends
paid
out
to
shareholders,
it
increases
equity or the owner’s claim on the firm.

There is NOT a corresponding
“
cash fund
”
in the asset
section
equal
to
the
balance
in
retained
earnings.
Changes
in retained earnings are a function of net income and
dividends declared, which may or may not correspond to
changes in cash.


Dividends:
distribution
of
cash
to
the
owners
of
the
firm.


c.

Balance
sheet
accounts
are
called
PERMANENT
ACCOUNTS
because
the
amounts

accumulate
year
after
year. The
ending
balance
from
the
previous year becomes the beginning balance for the next year.
For
example,
ending
cash
amount
in
2011
will
be
the
beginning
cash
amount in 2014, that is then adjusted for 2014 inflows and
outflows to determine the 2014 cash amount.







d.

Basic accounting equation:


ASSETS = LIABILITIES + STOCKHOLDERS' EQUITY






III.


Assets are resources and liabilities and equity represent the
claims on those resources.


The
powerful
implication
is
investments
in
assets
can
be
financed
with either DEBT or EQUITY!
















Statement of Retained Earnings (included in Statement of
Shareholders’ Equity) presents a

“video”
of the change in
retained earnings
from net income and dividends during the period
.



IV.

Statement of Cash Flows

–

“video”
of the sources and uses of cash
over a period of time
that explains the change in the cash balance
on the balance sheet.


a.

Operating
–

core
operations
and
items
related
to
measurement
of
net income

b.

Investing-
firms
INVEST
in
assets
so
includes
asset
transactions:

i.

buy and sell property plant and equipment

ii.

buy and sell investments

c.

Financing - firms FINANCE with debt and equity so includes debt
and equity transactions

i.

borrow and pay back nonoperating debt

ii.

issue and repurchase stock

iii.

pay dividends

d.

Format

+Net Operating Cash Flow

+ Net Investing Cash Flow

+ Net Financing Cash Flow

= Change in Cash for the Period

Beginning Cash from Last Year

+/- Change in Cash for the Period

= Ending Cash for This Year








Balance Sheet Account Name Definitions

An
account
accumulates the
increases and
decreases that
occur
for
a
single
item.
GAAP
does
not
provide an
all-inclusive list
of
acceptable account names so
their
usage

varies by firm.


Separate accounts are reported if they are
“
material
”
or crucial to
understanding
firm
performance.
For
example,
some
firms
divide
interest
revenue
and interest expense into separate accounts while other firms combine them into
one net account.


You will receive credit in exams as long as
the name is potentially used in
practice
and
accurately
describes
and
correctly
classifies
an
account
as
asset,
liability, or shareholders
’
equity.
It is acceptable, but not required, to
use more specific account names like prepaid rent for prepaid expense.


The following list of account names are commonly
used.




Assets:

Cash
–

currency or
balances in
checking accounts, CDs, or
money market accounts
available to meet current obligations.
Highly liquid short-term investments
with less than

90
days to
maturity and
little
risk
of
value changes are called
and

included in the cash account.

Short- term
investment or marketable securities
–
current value of
investments in
another firm
’
s debt or
equity securities that
can be
quickly
sold for cash.


Accounts receivable
–

amount due
from
customers for
goods
and
services already
delivered.
Gross accounts receivable is the amount owed.
Net accounts
receivable
is
the
amount
expected
to
be
collected
after
subtracting
an
allowance
for uncollectible accounts.


Notes receivable
–

amount to
be
received from an
outside entity formalized with
a note or lending agreement that specifies interest and payment terms.