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24 Cards in this Set
- Front
- Back
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Accounting
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information and measurement system that identifies, records, and communicates relevant, reliable, and comparable information about an organization's business activities
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bookeeping
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recording of transactions and events, either manually or electronically
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Financial accounting
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area of accounting aimed at serving external users by providing them with general-purpose financial statements
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Managerial accounting
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serves the decision-making needs of internal users
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Generally Accepted Accounting Principles (GAAP)
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concept and rules that govern financial accounting practices
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Financial Accounting Standards Board (FASB)
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private group that sets both broad and specific principles
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Securities and Exchange Commission (SEC)
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government group that establishes reporting requirements for companies that issue stock to the public
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International Accounting Standards Board (IASB)
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issues IFRS that identify preferred accounting practices
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Cost Principle
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accounting information is based on actual cost. Cash is given for a service, its cost is measured as the amount paid
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Revenue Recognition Principle
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provides guidance on when a company must recognize revenue. To recognize means to record it
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Matching Principle
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company must record its expenses incurred to generate the revenue reported
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Full disclosure principle
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company to report the details behind financial statements that would impact users' decisions
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Going concern principle
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accounting information reflects a presumption that the business will continue operating instead of being closed or sold
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Monetary Unit Assumption
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we can express transactions and events in monetary units
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sole propietorship
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business owned by one person. Seperate entity for accounting principles.
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Partnership
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business owned by two or more people
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Corporation
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business legally separate from its owners, meaning it is responsible for its own acts and its own debts
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Basic Accounting Equation
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Assets= Liabilities+ Equity
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A
L O R E |
Debit Credit
+ A - - L + - O + - R + + E - |
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A
L O R E |
Assets
Liability Owners Equity Revenues Expenses |
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Unearned=
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Liability
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Prepaid=
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Asset
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ledger
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record containing all accounts used by a company
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Purchase Order
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document used by the purchasing department to place an order with a seller
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