Welcome to the Accounting Flashcards Tool. This is designed as a simple supplementary resource for the textbook ‘Short Introduction to Accounting’, and aims to help students grasp the meaning of the core essential terms within the book. Each term will appear on its own, and you can then click to check the definition. Click or press [space] to begin.

Equity [ click for answer ] term: 1 of 11

The residual interest in the assets of an entity after deducting all its liabilities. [ click for next term ] definition: 1 of 11

Expense [ click for answer ] term: 2 of 11

A decrease in net assets that makes shareholders worse off. [ click for next term ] definition: 2 of 11

Fair value [ click for answer ] term: 3 of 11

Market price; the amount for which an asset could be exchanged in an arm’s length transaction. [ click for next term ] definition: 3 of 11

Financing activities [ click for answer ] term: 4 of 11

Activities that change the size and composition of the equity and debt of an entity, reported as a category in the cash flow statement. [ click for next term ] definition: 4 of 11

Fixed assets [ click for answer ] term: 5 of 11

Assets held for ongoing use within the business, with an expected life exceeding one year. [ click for next term ] definition: 5 of 11

Gross profit [ click for answer ] term: 6 of 11

A subtotal in the income statement, equal to revenue less cost of goods sold, typically expressed as a percentage gross profit margin. [ click for next term ] definition: 6 of 11

Income [ click for answer ] term: 7 of 11

An increase in net assets that makes shareholders better off. [ click for next term ] definition: 7 of 11

Income statement, or profit and loss account (P&L) [ click for answer ] term: 8 of 11

Financial statement that presents an entity’s income and expenses for a reporting period. [ click for next term ] definition: 8 of 11

Intangible asset [ click for answer ] term: 9 of 11

An identifiable non-monetary asset without physical substance. [ click for next term ] definition: 9 of 11

Inventory, or stock [ click for answer ] term: 10 of 11

Finished goods, work-in-progress or materials held ultimately for sale in the ordinary course of business. [ click for next term ] definition: 10 of 11

Inventory turnover [ click for answer ] term: 11 of 11

A ratio measuring the holding period for inventory, defined as (inventory/annual cost of sales) * 365 days. [ End of flashcard 3 ] definition: 11 of 11