ACG-2021 Lecture Notes - Lecture 4: Accrual, Trial Balance, General Ledger

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28 Apr 2017

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Lecture 4
full disclosure principle
- accounting principle that dictates that companies disclose circumstances and
events that make a difference to financial statement users
Generally accepted accounting principles (GAAP)
- a set of rules and practices, having substantial authoritative support, that the
accounting profession recognizes as a general guide for financial reporting
intangible assets
- assets that do not have physical substance
- Ex: patents, goodwill
International accounting standards board (IASB)
- an accounting standard-setting body that issues standards adopted by many
countries outside of the US
- the ability of a company to pay obligations that are expected to become due
within the next year or operating cycle
long-term investments
- generally, (1) investments in stocks and bonds of other corporations that
companies hold for more than one year, and (2) long-term assets, such as land
and buildings, not currently being used in the company's operations
Long-term liabilities (aka long term debt)
- obligations that a company expects to pay after one year
operating cycle
- the average time required to go from cash to cash in producing revenues
Property, plant, and equipment (PPE)
- assets with relatively long useful lives that companies use in operating the
business and are not intended for resale
Securities and Exchange Commission (SEC)
- the agency of the US government that oversees US financial markets and
accounting standard-setting bodies
- the ability of a company to pay interest as it comes due and to repay the balance
of debt at its maturity
Statement of Stockholders' equity
- a financial statement that presents the factors that caused stockholders' equity to
change during the period, including those that caused retained earnings to
working capital
- the difference between the amounts of current assets and current liabilities
accounting transactions
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