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75 Cards in this Set
- Front
- Back
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acounting
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practice of measureing, intrepting, and communicating finincial information to support internal and external business decision making
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certified piblic accountant
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accountant who met specified educational and experiental requirements and passed a comprehensive examination on acounting theory and practice
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accounting processes
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set of activities involved in converting information about individual transactions into finincial statements
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public company acounting oversight board
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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
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asset
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anything of value owned or leased by a business
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liability
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claims againts a firms assets by a creditor
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owners equity
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all claims of the proprietor, partners, or stockholders against the assets of a firm, equal to the excess of assets over liabilities
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basic accounting equation
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relationship that states that assets equal liabilities plus owners equity
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balnce sheet
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statement of a firms financial position--what it owns and the claims against its assets--at a particular point in time
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income statement
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financial record of a companies revenues, expences, and profits over a period of time
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statement of cash flows
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statements of a firms cash reciepts and cash payments that presentrs information on its sources and uses of cah
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accural accounting
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accounting method that records revenue and expenses when they occur, not necessarily when cash actualy changes hands
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public accountant
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professional who provides accouting services to individuals or business firms for a fee
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management accountant
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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
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government acountant
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accountant who performs professional services similar to those of management accountants and determines how efficently government agencies accomplish their objectives
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bottom line
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overall profit or loss incurred by a firm over a period of time
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free cash flow
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cash floww from operations minus capital expendetures
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ratio analysis
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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
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liquidity ratios
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financial ratios measuring a firms ability to meets its short term obligations when they must be paid
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profitability ratios
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ratios used to measure the organizations overall financial performance by evaluating its ability to generate revenues in excess of operating cost and other expenses
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leverage ratios
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measures the extent to which a firm relies on debt financing
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activity ratio
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measures of the effectiveness of managements use of the firms resources
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budget
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organizations plan for how it will raise and spend money during a given period of time
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cash budget
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accounting report that track's a firms cash inflow's and outflow's; usually prepared monthly
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finance
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business function of planning, obtaining, and managing a companies funds to accomplish its objectives in the most effective possible way.
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financial manager
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employee responsible for developing and implementing the firms financial plan and for determining the most appropriate sources and uses of funds
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chief financial officer
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top finance executive responsible for directing a firms MIS and related computer operations
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financial plan
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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
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money
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anything generally accepted as payment for goods or services
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debt capital
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funds obtained through borrowing
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equity capital
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funds provided by the firms owners when they reinvested earnings, make additional contributions, or issue stock to investirs
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bonds
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certificate of indebtedness sold to raise longterm funds for a corporation or government agency
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leverage
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technique of increasign the rate of return on an investment by financing it with borrowed funds
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financial systems
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process by which funds are transferred from savers to users
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depository institutions
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finincial instuitions that accept deposits that can be converted into cash on demand
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federal reserve system
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central bank of the United States
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monetary policy
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government action to increase or decrease the money supply and change banking requirements and interest rates to influence bankers' willingness to make loans
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vice president for financial management
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executive responsible for peparing financial forecasts and analyzing major investment decisions
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treasurer
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executive responsible for all of the company's financing activities, including managing cash, the tax department and shareholders relations
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controller
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chief accounting manager; the person who keeps the company's books, prepares financial statements, and conducts internal audits
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risk-return trade-off
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optimal balance between risk and return
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demand deposits
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deposits held in banks NOW acounts, and credit union share draft accounts
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M1
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total value of coins, currency, traveler's checks, bank checking account balances, and the balances in other demand deposit accounts
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M2
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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
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private placements
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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
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venture capitalist
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business firms or groups of inviduals who invest in new and growing firms in exchange for an ownership share
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electronic funds transfer systems
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computerized system for conducting financial transactions over electronic links
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underwriting
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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
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discount rate
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interest rate charged by the Federal Reserve on short-term loans to member banks
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open market operations
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technique of controlling the money supply growth rate by buying or selling U.S. Treasury securities
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federal fund rate
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rate at which one bank lends reserves to another bank
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security
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stock, bond, or money market instrument that represents an obligation on the part of the issuer.
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primary market
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market where new security issues are first sold to investors; the issuer recieves the proceeds from the sale.
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secondary market
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financial markets where previously issued securities are traded among investors.
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money market instruments
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short-term debt securities issued by corporations, financial institutions such as banks, and governments
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secured bond
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bond backed by the specific pledge of a company's assets
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debenture
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bond backed by the reputation of the issuer rather than by a specific pledge of a company's assets
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common stock
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shares of ownership in a corporation
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preferred stock
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stock whose holders receive preference over holders of common stock in the payment of dividends but have limited voting rights
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stock exchange
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centralized marketplace where primarily common stocks are traded
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brokerage firm
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financial intermediary that buys and sells securities for individual and and institutional investors
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mutual fund
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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
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full and fair disclosure
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requirement that investors should be told all relevent information by stock or bond issurers so they can make informed decisions
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insider trading
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use of material nonpublic information to make investments profitable
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initial public offering
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first sale of a firm's stock to the investing public
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investment banker
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fiancial intermediary that purchases an issure or securities from the firm or government and then resells the issue to investors
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underwriting
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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
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government bond
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debt obligations issued by the U.S. Treasury; they are backed by the full faith and credit of the U.S. government
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municipal bond
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credit instruments issued by state or local governments that can be either revenue bonds or general obligations bonds
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bond rating
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tool used by bond investers to assess the riskiness of a bond
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call provision
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ability of an issuer to redeem a bond prior to its maturity at a prespecified price
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market order
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investor's request to buy or sell a security at the current market price
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limit order
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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
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price earnings ratio
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investment ratio calculated by dividing current market price by the annual earnings per share
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regulation
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requirement that firms share information with all investors at the same time
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