Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

61 Cards in this Set

  • Front
  • Back
What is financial accounting?
The branch of accounting that focuses on information for people outside the firm.
What is managerial accounting?
The branch of accounting that focuses on information for internal decision makers.
What does FASB stand for?
Financial Accounting Standards Board
What does the FASB do?
It is a private organization that determines how accounting is practiced in the United States.
What does AICPA stand for?
American Institute of Certified Public Accountants
What is IMA stand for?
Institute of Management Accountants
What groups does the FASB work with?
What does GAAP stand for?
Generally Accepted Accounting Principles
What is GAAP?
The rules that govern public accounting principles.
What is a CMA?
A certified management accountant, licensed accountant that works for a single company.
What is an audit?
An examination of a companies financial situation.
What is a proprietorship?
A firm with a single owner that is liable for the actions of the firm.
What is a partnership?
Two or more individuals that are viewed as liable for the actions of the firm.
What is a Corporation?
A business owned by stockholders created through an article of incorporation, the corporation becomes the legal enity.
What is a stockholder or shareholder?
A person that owns stock in a corporation.
What is the: life of a corporation?
What is an: entity?
An organization or a section of an organization that viewed as a seperate economic unit.
What is the: entity concept?
The idea that an accounting entity stands apart as a seperate accounting unit.
What is the: reliability/objectivity principle?
The idea that data used for accounting should be based on the "most reliable data available"
What is the: cost principle?
The idea that acquired assets and services should be recorded at actual (historical) cost.
What is the: Going-Concern Concept?
Under the assumption of continued operation, assets will be used for their intended purpose.
What is the: stable monetary unit concept?
The idea that accountants assume that a currency is stable and do not consider inflation.
What are: assets?
Economic resources that are expected to be of benifit in the future.
What is the: accounting equation?
Assets = Liabilities + Owner's Equity
What are: liabilities?
An economic obligation (debt) payable to a party outside the business
What is: owner's equity?
The claim of a business owner to assets of the business or capital
What is: accounts receivable?
a promise to receive cash from a party that has received goods or services
What is: notes receivable?
a written promise for a future collection of cash
What is: accounts payable?
A liability backed by the credit standing of the debtor
What is: notes payable?
a written promise of future payment
What is: Revenue
Increase in owners equity through delivery of goods or services
What are: Owner Withdrawls
Amounts removed from the business by the owner, causing a decrease in stockholders equity
What are: Expenses
A decrease in owner's equity through use of assets or an increase in liabilities
What is a: Transaction
Any event that effects the financial position of a firm
What is the: Balance Sheet
The statement of financial position is a snapshot of the assets, liabilites and owners equity in a firm at a certian time.
What is: Net Income
Total Revenue - Total Expense = (Net Earnings,net income, net profit)
What is: Net Loss
if net earnings are negative
What is: Income Statement
The win/loss record for the company over a period of time. Summary of: revenue, expenses, net income, net loss. (Statement of Earnings)(Statement of Operations)
What is: Statement of Owner's Equity
Summary of changes in owner's equity over a period of time
What is: Statement of Cash Flows
Reports Cash receipts and cash payments over a during a period of time.
What is a proper heading for a financial statement?
Name of Firm

Name of Financial Statement

Date or Time Covered in the Statement
GAAP are formulated by the...
Financial Accounting Standards Board (FASB)
Which type of organization is owned by its stockholders?
Which accounting concept states that we should record transactions at amounts that can be verified?
Cost Principle
The balance sheet report...
Financial position on a specific date
The income statement reports...
Results of operations for a specific period
What is accounting?
The information system that measures business activities, processed into reports and then communicated to decision makers.
What are financial statements?
Documents that report on a business in monetary amounts providing information to decision makers
What is a CPA?
A licensed accountant that serves the puclib rather than one particular company.
What is a shareholder?
A person that owns a stake in a company
What is a stockholder?
A person that owns a stake in a company
What is capital?
The claim of a business owner to the assets of a company... also known as stockholders equity.
matching principle
Guide to accounting for expenses.
1. Identify expenses during period
2. Match them against all revenues over the same period.
prepaid expense
Advance of payments of expenses
revenue principle
The basis for recording revenues; tells accountants when to record revenue and the amount of revenue to record.
time-period concept
Ensures that information is reported at regular intervals.
unearned revenue
Revenue that has been recorded by
accrual accounting
Accounting that records the impact of a businesss event as it occurs, regardless of whether the transaction affected cash.
Cash-basis accounting
Records transactions only when cash is received or paid.
Adjusting entry
An entry that attempts to adjust earnings and expenses so that statements reflect time-periods properly.
Types of adjusting entries
Prepaid and Accrual
1. Prepaid expenses
2. Depreciation
3. Accrued expenses
4. Accrued Revenues
5. Unearned revenues