front 1 Accounting | back 1 A system that organizes financial data into a format for whoever is interested in the information |
front 2 The people that are interested in the data/information provided by accounting is | back 2 Users |
front 3 Accounting Information System | back 3 A system of recording and organizing financial information |
front 4 Accounts | back 4 A measurement used to record business transactions that have a financial impact |
front 5 Financial Statements | back 5 1. Income statement 2. Statement of retained earnings 3. Balance sheet 4. Statement of cash flows |
front 6 Internal USERS | back 6 Owners, Employees, Managers |
front 7 External USERS | back 7 Customers, Investors, Creditors |
front 8 Regulators | back 8 Government, IRS, SEC, State, City, County |
front 9 Financial Accounting Standards Board (FASB) | back 9 Formed in 1973, sets rules for generally accepted accounting principles. Created because of depression and market crash |
front 10 Generally Accepted Accounting Principles (GAAP) | back 10 A set of accounting standards established by the members of the accounting community. Established by the FASB. Each country has their own GAAP |
front 11 International Accounting Standards Board (IASB) | back 11 Independent organization made in 2001 to achieve global accounting standards; responsible for creating the IFRS |
front 12 International Financial Reporting Standards (IFRS) | back 12 International accounting standards for use of the international accounting community; Made by the IFRS |
front 13 Financial Accounting | back 13 The process that creates financial reports on an entity for internal and external parties (This is used for the public to see and to analyze) |
front 14 Managerial Accounting | back 14 The process that measures, identifies, and communicates financial information needed for management to plan and control entity operations |
front 15 Economic entity assumption | back 15 The business is separate entity from its owners |
front 16 Going Concern assumption | back 16 The idea that a company will continue will continue to operate for the future |
front 17 Monetary unit assumption | back 17 Us dollar as the monetary unit of measure, single currency |
front 18 Periodicity assumption | back 18 Accounting records businesses transactions in predefined chunks of time (months, quarters, years) |
front 19 Historical cost Principle | back 19 Idea that company should measure an asset by how much it costs; the asset retains original historical cost value, despite market value |
front 20 Fair value principle | back 20 idea that a company should measure an asset by its fair value; meaning the price the company would receive if it sold the asset (Market based measurement) |
front 21 Revenue recognition principle | back 21 company recognizes revenue when it has satisfied its performance, usually done when delivering a product or service to customer |
front 22 Expense recognition principle | back 22 Company recognizes when expense is incurred in the time period that revenue was recognized (Matching principle) |
front 23 Full disclosure principle | back 23 Company discloses all information that is important that would make an influence of decisions |
front 24 Materiality is | back 24 financial information that influences people to determine whether or not some information is important or not |
front 25 Industry Practice | back 25 Helps accountants follow established standards, common practices, make good decisions |