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52 Cards in this Set

  • Front
  • Back
The process of identifying, measuring, and communicating econominc information to various users.
The branch of accounting concerned with providing management with information to facilitate planning and control.
Management Accounting
The branch of accounting concerned with the preparation of financial statements for outsiders.
Financial Accounting
The owners' claim on the assets of an entity.
Owners' Equity
The owners' equity in a corporation.
Stockolder's Equity
The part of owners' equity that represents the income earned less dividends paid over the life of an entity.
Retained Earnings
The financial statement that summarizes the assets, liabilities, and owners' equity at a specific point in time.
Balance Sheet
A statement that summarizes revenues and expenses.
Income Statement
A distribution of the net income of a business to its owners.
The statement that summarizes the income earned and dividends paid over the life of a business.
Statement of Retained Earnings
Assets are recorded at the cost to acquire them.
Cost Principle
The assumption that an entity is not in the process of liquidation and that it will continue indefinetly.
Going Concern
The yardstick used to measure amounts in financial statements; the dollar in the US.
Monetary Unit
Artificial segment on the calender used as the basis for preparing financial statements.
Time Period
The various methods, rules, practices, and othe rprocedures that have evolved over time in response to the need to regulate the preparation of financial statements.
Generally Accepted Accounting Principles (GAAP)
The federal agency with ultimate authority to determine the rules in preparing financial statements for companies whose stock is sold to the public.
Securities and Exchange Commission (SEC)
The group in the privatesector with authority to set accounting standards.
Financial Accounting Standards Board (FASB)
The professional organization for certified public accountants.
American Institute of Certified Public Accountants (AICPA)
The quality of accounting information that makes it comprehensible to those willing to spend the necessary time.
Th capacity of information to make a difference in a decision.
The quality that makes accounting information dependable in representing the events that it purports to represent.
For accounting information, the quality that allows a user to analyze two or more companies and look for similarities and differences.
The process of allocating the cost of a long-term tangible asset over its useful life.
For accounting information. the quality that allowes a user to compare two or more accounting periods for a single company.
The magnitude of an accounting information omission or misstatement that will affect the judgement of someone relying on the information.
The practice of using the least optimistic estimate when two estimates of amounts are about equally likely.
The period of time between the purchase of inventory and the collection of any receivable from the sale of inventory.
Operating Cycle
An asset that is expected to be realized in cash or sold or consumed during the operating cycle or within one year if the cycle is less than one year.
Current Asset
An obligation that will be satisfied withing the next operating cylce or within one year if the cycle is shorter than one year.
Current Liability
The nearness to cash of the assets and liabilities.
Current assests minus current liabilities.
Working Capital
Current assets divided by current liabilities.
Current Ratio
An income statement in which all expenses are added together and subtracted from all revenues.
Single-Step Income Statement
An income statement that shows classifications of revenues and expenses as well as important subtotals.
Mutiple-Step Income Statement
Sales less cost of goods sold.
Gross Profit
Gross profit to net sales.
Gross Profit Ratio
Net Income divided by net sales
Profit Margin
A happening of consequence to an entity.
An event involving interaction between an entity and its environment.
External Event
An event occurring entirely within an entity
Internal Event
Any event that is recognized in a set of financial statements.
A piece of paper that is used as evidence to record a transaction.
Source Doucument
Record used to accumulate amounts for each individual asset, liability, revenue, expense, and component of owners equity.
A numerical list of all the accounts used by a company.
Chart of Accounts
A book, file, hard drive, or other device containing all the accounts.
General Ledger
An entry to the right side of an account.
An entry on the left side of an account.
A system of accounting in which every transaction is recorded with equal debits and credits and the accounting equation is kept in balance.
Double-entry System
The process of transferring amounts from a journal to the ledger accounts.
The act of recording journal entries.
The journal used in place of a specialized journal.
General Journal
A list of each account and its balance; used to prove equality of debits and credits.
Trial Balance