accounting test 1 vocabulary

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1

accountant

Designs the accounting information system and focuses on analyzing
and interpreting information.

2

accounting

A system of gathering financial information about a business and
reporting this information to users.

3

auditing

Reviewing and testing to be certain that proper accounting policies and
practices have been followed.

4

Exposure Draft

This document explains the rules that FASB believes firms should follow in accounting for a particular event. Based on the responses to the exposure draft, the Board will decide if any changes are necessary before issuing a final standard.

5

financial accounting

Includes preparing various reports and financial statements and analyzing operating, investing, and financing decisions.

6

Financial Accounting Standards Board Accounting Standards Codification

This Codification is an electronic database that provides one authoritative source for
the standards which must be followed by U.S. companies.

7

forensic accounting

A specialized field that combines fraud detection, fraud prevention, litigation support, expert witnessing, business valuations, and other
investigative activities

8

para-accountant

A paraprofessional who provides many accounting, auditing, or tax services under the direct supervision of an accountant.

9

Preliminary Views

The first document issued by FASB when developing an accounting standard. This document identifies the pros and cons of various accounting treatments for an event and invites others to comment.

10

Sarbanes-Oxley Act (SOX)

An act passed by Congress to help improve reporting practices of public companies.

11

(double underlines) indicate a

total

12

Dollar signs are used where?

at the top of columns and for the first amount entered in a column beneath a ruling.

13

On the balance sheet, assets are listed from most ____ to most _____.

liquid / Liquidity

14

Liquidity measures

the ease with which the asset will be converted to cash.

15

Liabilities are listed how?

from most current to least current

16

business entity concept

The concept that non-business assets and liabilities are not included in the business entity’s accounting records.

17

Name the six major elements of the accounting equation.

assets, liabilities, owner’s equity (which expands into capital, revenues, expenses, and withdrawals.

18

what order does the statement of owner's equity, income statement and balance sheet need to be in

income statement
statement of owner's equity
balance sheet

19

The headings to the financial statements answer three questions:

Who? What? When?

20

when preparing Financial Statements, in what order are expenses listed

highest to lowest dollar amount.