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75 Cards in this Set

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  • Back
practice of measureing, intrepting, and communicating finincial information to support internal and external business decision making
certified piblic accountant
accountant who met specified educational and experiental requirements and passed a comprehensive examination on acounting theory and practice
accounting processes
set of activities involved in converting information about individual transactions into finincial statements
public company acounting oversight board
five member board created by the Sarbanes-Oxley Act of 2002 to set audit standards and to investigate and sanction accounting firms that certify the books on publicaly traded firms;members of the board are appointed by the securities exchange comission to serve staggered five year terms
anything of value owned or leased by a business
claims againts a firms assets by a creditor
owners equity
all claims of the proprietor, partners, or stockholders against the assets of a firm, equal to the excess of assets over liabilities
basic accounting equation
relationship that states that assets equal liabilities plus owners equity
balnce sheet
statement of a firms financial position--what it owns and the claims against its assets--at a particular point in time
income statement
financial record of a companies revenues, expences, and profits over a period of time
statement of cash flows
statements of a firms cash reciepts and cash payments that presentrs information on its sources and uses of cah
accural accounting
accounting method that records revenue and expenses when they occur, not necessarily when cash actualy changes hands
public accountant
professional who provides accouting services to individuals or business firms for a fee
management accountant
accountant employed by a business other than a public accounting firm and who is responsible for collecting and recording finincial transactions and preparing financial statements used by a firms managers in decision making
government acountant
accountant who performs professional services similar to those of management accountants and determines how efficently government agencies accomplish their objectives
bottom line
overall profit or loss incurred by a firm over a period of time
free cash flow
cash floww from operations minus capital expendetures
ratio analysis
commonly used tools for measuring the firms liquidity, profitability, and reliance on debt financing, as well as the effectiveness of managements use of its own resources, compared to other firms and with the firms own past performances
liquidity ratios
financial ratios measuring a firms ability to meets its short term obligations when they must be paid
profitability ratios
ratios used to measure the organizations overall financial performance by evaluating its ability to generate revenues in excess of operating cost and other expenses
leverage ratios
measures the extent to which a firm relies on debt financing
activity ratio
measures of the effectiveness of managements use of the firms resources
organizations plan for how it will raise and spend money during a given period of time
cash budget
accounting report that track's a firms cash inflow's and outflow's; usually prepared monthly
business function of planning, obtaining, and managing a companies funds to accomplish its objectives in the most effective possible way.
financial manager
employee responsible for developing and implementing the firms financial plan and for determining the most appropriate sources and uses of funds
chief financial officer
top finance executive responsible for directing a firms MIS and related computer operations
financial plan
document specifying the funds a firm will need for a period of time, the timing of inflows and outflows, and the most appropiate sources and uses of funds
anything generally accepted as payment for goods or services
debt capital
funds obtained through borrowing
equity capital
funds provided by the firms owners when they reinvested earnings, make additional contributions, or issue stock to investirs
certificate of indebtedness sold to raise longterm funds for a corporation or government agency
technique of increasign the rate of return on an investment by financing it with borrowed funds
financial systems
process by which funds are transferred from savers to users
depository institutions
finincial instuitions that accept deposits that can be converted into cash on demand
federal reserve system
central bank of the United States
monetary policy
government action to increase or decrease the money supply and change banking requirements and interest rates to influence bankers' willingness to make loans
vice president for financial management
executive responsible for peparing financial forecasts and analyzing major investment decisions
executive responsible for all of the company's financing activities, including managing cash, the tax department and shareholders relations
chief accounting manager; the person who keeps the company's books, prepares financial statements, and conducts internal audits
risk-return trade-off
optimal balance between risk and return
demand deposits
deposits held in banks NOW acounts, and credit union share draft accounts
total value of coins, currency, traveler's checks, bank checking account balances, and the balances in other demand deposit accounts
meassure of the money supply including M1 plus a number of other financial assets that are almost as liquid as cash but do not serve directly as a medium of exchange
private placements
new stock or bond issuance that may not be sold publicly but only to a small select group of large investors such as pension funds and life insurance company
venture capitalist
business firms or groups of inviduals who invest in new and growing firms in exchange for an ownership share
electronic funds transfer systems
computerized system for conducting financial transactions over electronic links
process used by insurance companies to determine whom to insure and what to charge; in finance, process of purchasing a stock or bond issue from a firm of government and then reselling it to investors
discount rate
interest rate charged by the Federal Reserve on short-term loans to member banks
open market operations
technique of controlling the money supply growth rate by buying or selling U.S. Treasury securities
federal fund rate
rate at which one bank lends reserves to another bank
stock, bond, or money market instrument that represents an obligation on the part of the issuer.
primary market
market where new security issues are first sold to investors; the issuer recieves the proceeds from the sale.
secondary market
financial markets where previously issued securities are traded among investors.
money market instruments
short-term debt securities issued by corporations, financial institutions such as banks, and governments
secured bond
bond backed by the specific pledge of a company's assets
bond backed by the reputation of the issuer rather than by a specific pledge of a company's assets
common stock
shares of ownership in a corporation
preferred stock
stock whose holders receive preference over holders of common stock in the payment of dividends but have limited voting rights
stock exchange
centralized marketplace where primarily common stocks are traded
brokerage firm
financial intermediary that buys and sells securities for individual and and institutional investors
mutual fund
financial institution that pools investors money from purchasers of its shares and uses the money to acquire diversified portfolios of securities consistent with the fund's investment objectives
full and fair disclosure
requirement that investors should be told all relevent information by stock or bond issurers so they can make informed decisions
insider trading
use of material nonpublic information to make investments profitable
initial public offering
first sale of a firm's stock to the investing public
investment banker
fiancial intermediary that purchases an issure or securities from the firm or government and then resells the issue to investors
process used by insurance companies to determine whom to insure and what to charge; in finance, process of purchasing a stock or bond issue from a firm of government and then reselling it to investors
government bond
debt obligations issued by the U.S. Treasury; they are backed by the full faith and credit of the U.S. government
municipal bond
credit instruments issued by state or local governments that can be either revenue bonds or general obligations bonds
bond rating
tool used by bond investers to assess the riskiness of a bond
call provision
ability of an issuer to redeem a bond prior to its maturity at a prespecified price
market order
investor's request to buy or sell a security at the current market price
limit order
instructions that the brokerage firm is not to pay more than a specified price for a security if the investor is buying or not to accept less than a specified price if the investor is selling
price earnings ratio
investment ratio calculated by dividing current market price by the annual earnings per share
requirement that firms share information with all investors at the same time