Accounting Keys To Success

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accounting

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an information system that identifies, measures, records, and communicates relevant, reliable, consistent, and comparable information about an organization's economic activity

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audit

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a check of an organization's accounting systems and records

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bookkeeping/recordkeeping

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the part of accounting that involves recording economic transactions and events, either electronically or manually

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budgeting

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the process of developing formal plans for future activities, which often serve as a basis for evaluating actual performance

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business

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one or more individuals selling products or services for profit

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business entity principle

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every business is accounted for separately from its owner's personal activities

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common shares

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the name for a corporation's shares when only one class of share capital is issued

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controller

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the chief accounting officer of an organization

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corporation

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a business that is a separate legal entity under provincial or federal laws with owners who are called shareholders

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cost accounting

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a managerial accounting activity designed to help managers identify, measure, and control operating costs

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costs

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the expenses incurred to earn revenues (or sales)

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ethics

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beliefs that differentiate right from wrong

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external auditors/auditing

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examine and provide assurance that financial statements are prepared according to generally accepted accounting principles (GAAP)

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external users

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persons using accounting information who are not directly involved in the running of the organization; shareholders, customer, regulators, and suppliers

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financial accounting

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the area of accounting aimed at serving external users

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Generally Accepted Accounting Principles (GAAP)

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the rules that indicate acceptable accounting practice

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general accounting

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the task of recording transactions, processing data, and preparing reports for managers; includes preparing financial statements for disclosure to external users

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Government Accountants

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accountants who work for local, provicial, and federal government agencies

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internal auditors/auditing

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employees within organizations who assess whether managers are following established operating procedures and evaluate the efficiency of operating procedures

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internal controls

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procedures set up to protect assets, ensure reliable accounting reports, promote efficiency, and encourage adherence to company policies

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limited liability

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the owner's liability is limited to the amount of investment in the business

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limited liability partnership

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restricts partners' liabilities to their own acts and the acts of individuals under their control

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limited partnership

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includes both general partner(s) with unlimited liability and limited partner(s) with liability restricted to the amount invested

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management consulting

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activity in which suggestions are offered for improving a company's procedures; the suggestions may concern new accounting and interal control systems, new computer systems, budgeting, and employee benefit plans

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managerial accounting

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the area of accounting aimed at serving the decision-making needs of internal users

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partnership

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a business owned by two or more people, which is not organized as a corporation

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private accountants

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accountants who work for a single employer other than the government or a public accounting firm

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shareholders

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the owners of a corporation

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shares

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units of ownership in a corporation

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single proprietorship/sole proprietorship

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a business owned by one individual, which is not organized as a corporation

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social responsibility

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a commitment to considering the impact and being accountable for the effects that action might have on society

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taxation

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the field of accounting that includes preparing tax returns and planning future transactions to minimize the amount of tax paid; involves private, public, and government accountants

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unlimited liability

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when the debts of sole proprietorship or partnership are greater than its resources, the owner(s) is (are) financially responsible