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61 Cards in this Set
- Front
- Back
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What is financial accounting?
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The branch of accounting that focuses on information for people outside the firm.
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What is managerial accounting?
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The branch of accounting that focuses on information for internal decision makers.
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What does FASB stand for?
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Financial Accounting Standards Board
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What does the FASB do?
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It is a private organization that determines how accounting is practiced in the United States.
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What does AICPA stand for?
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American Institute of Certified Public Accountants
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What is IMA stand for?
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Institute of Management Accountants
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What groups does the FASB work with?
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IMA, AICPA, and SEC
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What does GAAP stand for?
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Generally Accepted Accounting Principles
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What is GAAP?
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The rules that govern public accounting principles.
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What is a CMA?
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A certified management accountant, licensed accountant that works for a single company.
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What is an audit?
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An examination of a companies financial situation.
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What is a proprietorship?
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A firm with a single owner that is liable for the actions of the firm.
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What is a partnership?
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Two or more individuals that are viewed as liable for the actions of the firm.
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What is a Corporation?
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A business owned by stockholders created through an article of incorporation, the corporation becomes the legal enity.
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What is a stockholder or shareholder?
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A person that owns stock in a corporation.
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What is the: life of a corporation?
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Indefinte
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What is an: entity?
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An organization or a section of an organization that viewed as a seperate economic unit.
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What is the: entity concept?
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The idea that an accounting entity stands apart as a seperate accounting unit.
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What is the: reliability/objectivity principle?
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The idea that data used for accounting should be based on the "most reliable data available"
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What is the: cost principle?
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The idea that acquired assets and services should be recorded at actual (historical) cost.
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What is the: Going-Concern Concept?
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Under the assumption of continued operation, assets will be used for their intended purpose.
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What is the: stable monetary unit concept?
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The idea that accountants assume that a currency is stable and do not consider inflation.
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What are: assets?
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Economic resources that are expected to be of benifit in the future.
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What is the: accounting equation?
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Assets = Liabilities + Owner's Equity
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What are: liabilities?
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An economic obligation (debt) payable to a party outside the business
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What is: owner's equity?
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The claim of a business owner to assets of the business or capital
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What is: accounts receivable?
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a promise to receive cash from a party that has received goods or services
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What is: notes receivable?
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a written promise for a future collection of cash
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What is: accounts payable?
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A liability backed by the credit standing of the debtor
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What is: notes payable?
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a written promise of future payment
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What is: Revenue
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Increase in owners equity through delivery of goods or services
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What are: Owner Withdrawls
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Amounts removed from the business by the owner, causing a decrease in stockholders equity
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What are: Expenses
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A decrease in owner's equity through use of assets or an increase in liabilities
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What is a: Transaction
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Any event that effects the financial position of a firm
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What is the: Balance Sheet
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The statement of financial position is a snapshot of the assets, liabilites and owners equity in a firm at a certian time.
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What is: Net Income
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Total Revenue - Total Expense = (Net Earnings,net income, net profit)
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What is: Net Loss
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if net earnings are negative
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What is: Income Statement
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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)
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What is: Statement of Owner's Equity
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Summary of changes in owner's equity over a period of time
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What is: Statement of Cash Flows
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Reports Cash receipts and cash payments over a during a period of time.
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What is a proper heading for a financial statement?
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Name of Firm
Name of Financial Statement Date or Time Covered in the Statement |
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GAAP are formulated by the...
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Financial Accounting Standards Board (FASB)
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Which type of organization is owned by its stockholders?
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Corporation
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Which accounting concept states that we should record transactions at amounts that can be verified?
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Cost Principle
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The balance sheet report...
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Financial position on a specific date
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The income statement reports...
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Results of operations for a specific period
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What is accounting?
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The information system that measures business activities, processed into reports and then communicated to decision makers.
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What are financial statements?
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Documents that report on a business in monetary amounts providing information to decision makers
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What is a CPA?
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A licensed accountant that serves the puclib rather than one particular company.
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What is a shareholder?
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A person that owns a stake in a company
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What is a stockholder?
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A person that owns a stake in a company
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What is capital?
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The claim of a business owner to the assets of a company... also known as stockholders equity.
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matching principle
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Guide to accounting for expenses.
1. Identify expenses during period 2. Match them against all revenues over the same period. |
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prepaid expense
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Advance of payments of expenses
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revenue principle
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The basis for recording revenues; tells accountants when to record revenue and the amount of revenue to record.
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time-period concept
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Ensures that information is reported at regular intervals.
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unearned revenue
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Revenue that has been recorded by
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accrual accounting
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Accounting that records the impact of a businesss event as it occurs, regardless of whether the transaction affected cash.
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Cash-basis accounting
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Records transactions only when cash is received or paid.
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Adjusting entry
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An entry that attempts to adjust earnings and expenses so that statements reflect time-periods properly.
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Types of adjusting entries
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Prepaid and Accrual
1. Prepaid expenses 2. Depreciation 3. Accrued expenses 4. Accrued Revenues 5. Unearned revenues |
