Horngren's Financial & Managerial Accounting with MyAccountingLab with Pearson EText Access Card Package: Chapter 1 Accounting Flashcards


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Accounting and the business environment
updated 8 years ago by Christine_Enderle
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1

Accounting

The information system that measures business activities, processes the information into reports, and communicates the results to decision makers.

2

Financial Accounting

The field of accounting that focuses on providing information for external decision makers

3

Managerial Accouting

The field of accounting that focuses on providing information for internal decision makers

4

Creditor

Any person or business to whom a business owes money

5

Certified Public Accountants(CPAs)

Licensed professional accountants who serve the general public

6

Certified Management accountants(CMAs)

Certified professionals who specialize in accounting and financial management knowledge. They typically work for a single company.

7

Financial Accounting Standards Board(FASB)

The private organization that oversees the creation and governance of accounting standards in the United States

8

Securities and Exchange Commission(SEC)

U.S. governmental agency that oversees the U.S. financial markets

9

General Accepted Accounting Principles(GAAP)

Accounting guidelines, currently formulated by the Financial Accounting standards board; the main U.S. accounting rule book.

10

Economic Entity Assumption

An organization that stands apart as a separate economic unit

11

Stockholder

A person who owns stock in a corporation

12

Sole Proprietorship

A business with a single owner

13

Partnership

A business with two or more owners and not organized as a corporation

14

Corporation

a business organized under state law that is a separate legal entity

15

Limited-Liability Company (LLC)

A company in which each member is only liable for his or her own actions

16

Cost Principle

A principle that states that acquired assets and services should be recorded at their actual cost.

17

Going concern assumption

Assumes that the entity will remain in operation for the foreseeable future

18

Monetary Unit assumption

the assumption that requires the items on the financial statements to be measured in terms of a monetary unit

19

International Financial Reporting Standards(IFRS)

A set of global accounting guidelines, formulated by the international accounting standards board

20

International Accounting Standards Board(IASB)

The private organization that oversees the creation and governance of International Financial Reporting Standards

21

Audit

An examination of a company's financial statements and records

22

Sarbanes-Oxley Act(SOX)

Requires companies to review internal control and take responsibility for the accuracy and completeness of their financial reports

23

Assets

Economic resources that are expected to benefit the business in the future. Something the business owns or has control of

24

Liabilities

Debts that are owed to creditors

25

Equity

the owner's claim to the assets of the business

26

Contributed Capital

owners contributions to a corporation

27

Revenues

amount earned from delivering goods or services to customers

28

expenses

the cost of selling good or services

29

Dividend

a distribution of a corporation's earnings to stock holders

30

common stock

represents the basic ownership of a corporation

31

retained earnings

capital earned by profitable operations of a corporation that is not distributed to stockholders

32

net income

the result of operations that occur when total revenues are greater than total expenses

33

net loss

the result of operations that occur when total expenses are greater than total revenues

34

Transaction

an event that affects the financial position of the business and can be measured reliably in dollar amounts

35

Accounts payable

a short-term liability that will be paid in the future

36

accounts receivable

the right to receive cash in the future from customers for goods sold or for services preformed

37

Financial Statements

Business documents that are used to communicate information needed to make business decisions

38

income statement

reports the net income or net loss of the business for a specific period

39

statement of retained earnings

reports how the company's retained earnings balance changed from the beginning to the end of the period

40

balance sheet

reports on the assets, liabilities and stockholders' equity of the business as of a specific date

41

statement of cash flows

Reports on a business' cash receipts and cash payments for a specific period

42

Return on Assets(ROA)

Measures how profitably a company uses its assets. Net income/average total assets