会计概念英文名词解释

Session1DefinitionsandElementsofFinancialStatementsYouwillneedtolearntheseunderlinedtermsforthemidterm!I.Incomestatement–“video”ofrevenues,expenses,gains,lossesoveraperiodoftimea.Basicdefinitions:Revenue–increaseinequity(andassociatedincreaseinassetsand/ordecreaseinliabilities)earnedfromthesaleofgoodsorprovisionofservicestocustomers;itismeasuredonagrossbasisastheamountofassetstobereceived.Expense–decreaseinequity(andassociateddecreaseinassetsand/orincreaseinliabilities)createdbysaleofgoods,renderingofservicesorpassageoftime;itismeasuredonagrossbasisastheamountofassetsconsumed.Gain–increaseinequityresultingfromsellingassetsorrecognizingtheincreaseinvalueofassets(ordecreaseinvalueofliabilities);itismeasuredonanetbasisasthepositivedifferencebetweencurrentvalueandamountrecordedonthebalancesheet.Loss–decreaseinequityresultingfromsellingassetsordecreaseinvalueofassets(orincreaseinvalueofliabilities);itismeasuredonanetbasisasthenegativedifferencebetweencurrentvalueandamountrecordedonthebalancesheet.Accountingperiod-thetimeperiodbetweenconsecutivebalancesheetsforwhichafirmpreparesanincomestatementandstatementofcashflows(e.g.,anannualreporthasa12-monthaccountingperiodandaquarterlystatementhasa3-monthaccountingperiod).b.Elements:Sales-revenuefromsellinggoodsorprovidingservicestocustomers,whichisreportedasthetoplineontheincomestatement.CostofGoodsSoldorCostofSaleslabor,material,andoverheadcostsdirectlyrelatedtoprovidinggoodsorservices.GrossProfitisthedifferencebetweenSalesRevenueandCostofGoodsSold,whichrepresentstheprofitthatisavailabletocoveralloftheotherexpensesontheincomestatement.OperatingExpensesareexpensesrelatedtotheordinaryoperatingactivitiesofthefirmofprovidinggoodsorservicestocustomersorgainsandlossesrelatedtooperatingassetslikePPE.OperatingProfitorIncomeequalsgrossprofitminusoperatingexpenses.OtherNonoperatingRevenueandExpenseareitemsrelatedtoFINANCINGactivities(i.e.,interestexpense)andINVESTINGactivities(i.e.,interestincomeandgainsandlossesoninvestments).IncomeBeforeTaxequalsoperatingprofitminusotherincomeandexpense.TaxexpenseequalsaGAAPbasedmeasureofthegovernmentchargesonincome.NetIncomeequalsincomebeforetaxminustaxexpense.c.IncomestatementaccountsarecalledTEMPORARYACCOUNTSbecauseamountsaccumulateforadefinedperiodoftimeandarethenzeroedoutwhenthebalanceistransferredtoretainedearnings.Annualincomestatementamountsrepresentthetotalrevenuesorexpensesfora12monthperiodcalledthefiscalyear.II.Balancesheet–“snapshot”ofassets,liabilities,stockholders’equityatapointintimea.BasicDefinitionsOperatingcycle-averagetimeittakestogofromcashtogoodsandservicessoldtocustomersandthenbacktocashcollectedfromcustomers.b.Elements:Asset:resourcethefirmcontrolsbecauseofapasttransactionoreventthatprovidesexpectedfuturebenefits.Currentasset:assetafirmexpectstoconverttocash,sell,orconsumewithinthelongerofoneyearoranoperatingcycle.Noncurrentasset:assetnotclassifiedascurrent.Liability:creditor’sclaimsorobligationthatrepresentsaprobablefutureeconomicsacrificeofassetsorservicesbasedonapasttransactionorevent.Currentliability:obligationafirmexpectstopaywithinthelongerofoneyearoranoperatingcycle.Noncurrentliability:liabilitynotclassifiedascurrent.Shareholders’equity:measureoffinancingprovidedbyownersofthefirmthatcapturesowners’residualclaimonassetsofthefirmaftersatisfyingliabilities.Retainedearnings:cumulativenetincomeminusdividendsoverthelifeofthefirm.Retainedearningsareasourceoffinancing.Whenearningsexceedthedividendspaidouttoshareholders,itincreasesequityortheowner’sclaimonthefirm.ThereisNOTacorresponding“cashfund”intheassetsectionequaltothebalanceinretainedearnings.Changesinretainedearningsareafunctionofnetincomeanddividendsdeclared,whichmayormaynotcorrespondtochangesincash.Dividends:distributionofcashtotheownersofthefirm.c.BalancesheetaccountsarecalledPERMANENTACCOUNTSbecausetheamountsaccumulateyearafteryear.Theendingbalancefromthepreviousyearbecomesthebeginningbalanceforthenextyear.Forexample,endingcashamountin2011willbethebeginningcashamountin2014,thatisthenadjustedfor2014inflowsandoutflowstodeterminethe2014cashamount.d.Basicaccountingequation:ASSETS=LIABILITIES+STOCKHOLDERS'EQUITYThepowerfulimplicationisinvestmentsinassetscanbefinancedwitheitherDEBTorEQUITY!Assetsareresourcesandliabilitiesandequityrepresenttheclaimsonthoseresources.III.StatementofRetainedEarnings(includedinStatementofShareholders’Equity)presentsa“video”ofthechangeinretainedearningsfromnetincomeanddividendsduringtheperiod.IV.StatementofCashFlows–“video”ofthesourcesandusesofcashoveraperiodoftimethatexplainsthechangeinthecashbalanceonthebalancesheet.a.Operating–coreoperationsanditemsrelatedtomeasurementofnetincomeb.Investing-firmsINVESTinassetssoincludesassettransactions:i.buyandsellpropertyplantandequipmentii.buyandsellinvestmentsc.Financing-firmsFINANCEwithdebtandequitysoincludesdebtandequitytransactionsi.borrowandpaybacknonoperatingdebtii.issueandrepurchasestockiii.paydividendsd.Format+NetOperatingCashFlow+NetInvestingCashFlow+NetFinancingCashFlow=ChangeinCashforthePer