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45 Cards in this Set
- Front
- Back
The information system that measures business activities, processes that information into reports and financial statements, and communicates the results to decision makers
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Accounting
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Business documents that report financial information about a business entity to decision makers
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Financial statements
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The branch of accounting that provides information to people outside the firm
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Financial accounting
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The branch of accounting that generates information for the internal decision makers of a business, such as top executives
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Management accounting
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A business with a single owner
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Proprietorship
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An association of two or more persons who co-own a business for profit
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Partnership
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A business owned by stockholders. A corporation is a legal entity, an "artificial person" in the eyes of the law
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Corporation
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A person who owns stock in a corporation. Also called a shareholder.
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Stockholder
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Another name for stockholder
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Shareholder
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Group elected by the stockholders to set policy for a coporation and to appoint its officers
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Board of directors
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Accounting guidelines, formulated by the Financial Accounting Standards Board, that governs how accounting is practical
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Generally accepted accounting principles (GAAP)
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An organization or a section of an organization that, for accounting purposes, stands apart from other organizations and individuals as a separate economic unit
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Entity
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The accounting principle that ensures that accounting records and statements are based on the most reliable data available. Also called the objectivity principle
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Reliablility principle
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Principle that states that assets and services shuld be recorded at their actual cost
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Cost principle
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Holds that the entity will remain in operation for the foreseeable future
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Going-concern concept
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The basis for ignoring the effect of inflation in the accounting records, based on the assumption that the dollar's purchasing power is relavtively stable
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Stable-monetary-unit concept
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The most basic tool of accounting: Assets= Liabilities + Owner's Equity
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Accounting equation
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An economic resource that is expected to be of benefit in the future
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Asset
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An economic obligation (a debt) payable to an individual of an organization outside the business
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Liability
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The cliam of the owners of a business to the assets of the business. Also called capital, stockholder's equity, or net assets
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Owner's Equity
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Another name for the owner's equity of a business
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Capital
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Money and any medium of exchange that a bank accepts at face value
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Cash
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The merchandise that a company sells to customers
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Merchandise inventory
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Long-lived assets, such as land, buildings, and equipment, used in the operation of the business.
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Property, plant, and equipment
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A liabiltiy backed by the general reputation and credit standings of the debtor
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Account payable
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A liability evidenced by a written promise to make a future payment
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Note payable
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A liability that falls due beyond one year from the date of the financial statements
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Long-term debt
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The stockholders' owernership interest in the assets of a corporation
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Stockholders' equity
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The amouint of stockholders' equity that stockholders have contributed to the corporation
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Paid-in capital
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The most basic form of capital stock
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Common stock
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The amount of stockholders' equity that the corporation has earned through profitable operation and has not given back to stockholders
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Retained earnings
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Increase in retained earnings from delivering goods or services to customers or clients
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Revenue
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Decrease in retained earnings that results from poerations; thae cost of doing business; opposite of revenues
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Expense
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Excess of total revenues over total expenses
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Net Income
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Excess of total expenses over total revenues
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Net loss
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Distributions (usually cash) by a corporation to its stockholders
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Dividends
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A financial statement listing an entitiy's revenues, expenses, and net income or net loss for a specific period
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Financial statements
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Summary of the changes in the retained earinings of a corporation during a specific period
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Statement of retained earnings
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Lis of an entity's assets, liabitilties, and owner's equity as of a specific date
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Balance sheet
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An asset that is expected to be converted to cash, sold, or consumed during the next 12 months, or within the business's normal operating cycle if longer than a year
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Current asset
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A debt due to be paid within one year or within the entity's operating cycle if the cycle is longer than a year
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Current liability
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Activities that create revenue or expense in the entity's major line of business; a section of the statement of cash flows.
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Operating activities
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Activities that increase or decrease the long-term assets available to the business; a section of the statement of cash flows
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Investing activities
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Activities that obtain from investors and creditors the cash needed to launch and sustain the business; a section of the statemnt of cash flows
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Financing Activities
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Reports cash receipts and cas payments classified accoring to the entity's major activities: operating, investing, and financing
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Statement of cash flows
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