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What is Secondary Capital investor?
Purchase or investment in a company after initial investments.  Primarily through Stock markets.
What two different markets do businesses usually operate in?
Input Market and Output Market.
What is a business?
An entity that makes and sells a product; Purchases an resells a product; or Provides a service.
Define Accounting
A system of preparing and communicating quantifiable information about a business to a variety of users who use the information to make economic decisions.
What is first factor of investment decision process?
Define problem (Have excess funds, they need to be invested)
What is second factor in Investment decision process
Make necessary assumptions; What conditions will prevail, eliminate extraneous options.
What is Third Factor in Investment decision process
Gather information:
What is fourth Factor in investment decision process?
Analyze available information
What is fifth factor in investment decision process?
Reach a Conclusion
What is sixth factor in investment decision process?
Make a decision: lend/buy stock, Sell stock/Call in loan, or do nothing
What is final step in investment decision process?
Feedback: Was my investment sound?  What's the new problem? Start the cycle anew.
What is a primary capital investor
Principle stakeholders in company.  Initial investors,  Those that would be selling original stock in the secondary capital market.
Which accounting specialty is primarily oriented on providing quantifiable information to current and potential investors? Financial, not-for-profit, Government, or Managerial
Financial accounting was described as being oriented toward the information needs of...
Investors (outsiders)
In the context of making an investment or credit decision, what role does the financial accountant most closely fulfill?
Developing and providing information intended to reduce uncertainty
Who invented accounting, and when?
Paciola, in the late 1400's
What is an Asset?
Probable future economic benefits obtained or controlled by an entity due to past transactions or events
What is a Liability?
Probable future sacrifices of economic benefits from present obligations of an entity to transfer assests or provide services to others in the future.
What is owners equity?
The residual interest in the assets of the entity after deducting its liabilities
What is the Financial equation?
Assets=Liabilities - Owners Equity
What are some synonyms for Owners equity?
Net Assets, Book Value, Stockholders Equity
Owners equity is composed of what two accounts?
Paid-in Capital
Retained Earnings
Retained earnings is composed of what?
Earnings (net income) -Dividends
Net income is composed of what?
What are 4 basic Financial Statements
Balance Sheet
Statement of Stockholders' Equity
Income Statement
Statement of Cashflows
What is a synonym for 'Balance Sheet'?
Statement of Financial Position/Condition
What is a synonym for 'Statement of Stockholders' equity'?
Retained Earnings
What is a synonym for 'income Statement'?
Statement of Earnings
What is the purpose of the Balance Sheet?
to convey information about an entity's assets, liabilities, equity, and their relationships to each other at a moment in time.
What is the purpose of the Statement of Stockholders Equity (Retained Earnings)?
Explains changes in retained earnings over a period of time. (Since last Annual report)
What is the purpose of the Income statement (Statement of earnings)
to reflect the extent to which and the ways in which the equity of an entity increased or decreased from all sources other than transactions with owners
What is the purpose of the statement of Cash Flows
It summarizes the change in the cash account that occured during the last year grouped into Operating, investing and financing categories.
On the Cash flow statement, is interest paid considered a financing or operating cash flow?
What are the three Cash flow catagories?
On the cash flow statement, which catagory would cash flow for borrowing and repaying principal on a loan be put in?
On Cash flow Statement, which catagory would Dividends paid be put into?
On Cash flow statement, Which Catagory would interest and dividends recieved be put into?
What are the 4 assumptions taken for granted for financial statements
Fiscal period
Going Concern
Stable dollar
What is an Entity?
An independant reporting organization which may be a total business or a portion of a business if it is independant financially from other parts of business
What is a fiscal period
The time period covered by financial reports.  May be issued quarterly or annually
What is "Going Concern"?
An assumption that the reporting entity is expecting to continue to operate as a business for the indefinite future
What is meant by the Assumption "stable dollar"?
The assumption that the unit of measurement is constant, in the case of financial reports, the dollar.
What are the 4 prinicples that provide guidance on which, when and how events are recognized and reported in financial statements?
Revenue Recognition
Full disclosure
How does objectivity come into play in preparing financial reports?
The most reliable information is the most objective but the most informative may not be the most objective.  Subjective judgement should be used to find the balance.
What is meant by the principle 'revenue recognition'?
Revenue is only recorded when it has been earned, realized and/or expected to be realized sometime in the future.
How is Revenue Earned?
Service or product has been delivered and paid for. 
What is meant by the principle "Matching"?
Outflows of economic resources are recorded as expenses only when they contribute to the production of revenues in the same period.

What is meant by the term Full Disclosure?
Preparers should err on the side of providing more information to decision makers rather than less.
What are 4 reasons for exceptions to FASB accounting standards
Cost Benefit
Industry practice
What is meant by Conservatism when dealing with uncertainty in preparing financial reports?
Undervalue net assets and give early recognition to losses to minimize the impact of mistakes in judgement.
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