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

45 Cards in this Set

  • Front
  • Back
Account Payable
A liability blocked by the general reputation and credit standing of the debtor.
The information system that measures business activities, processes that information into reports and financial statements, and communicates the results to decision makers.
Accounting Equation
Assets = Liabilities + Owners Equity
An economic resource that is expected to be of the benefit in the future.
Balance Sheet
List of an entity's assets, liabilites, and owner's equity as of a special date. Also called the statement of financial position.
Board of Directors
Group elected by the stockholders to set policy for a corporation and to appoint its officers.
Another name for the owner's equity of a business.
Money and any medium of exchange that a bank excepts at face value.
Common Stock
The most basic form of capital stock.
A business owned by stockholders. A corporation is a legal entity, an "artificail" person in the eys of the law.
Cost Principle
Principle that states that assets and services should be recorded at their actual cost.
Current Assets
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.
Current Liabilities
A debt due to be paid within one year or within the entity's operating cycle if the cycle is longer than a year.
Distribution (usually cash) by a corporation to its stockholders.
An organization or a section of an organization that, for accounting purposes, stands apart from other organizations and individuals as a seperate econmoic unit.
Decrease in retained earnings that results from operations; the cost of doing business; opposite of revenues.
Financial Accounting
The branch of accounting that provides information to people outside of the firm.
Financial Statements
Business documents that report financial information about a business entity to decision makers.
Financing Activities
Activities that obtain from investors and creditors the cash needed to launch and sustain the business; a section of the statement of cash flows.
note payable
A liability evidenced by a written promise to make a future payment.
Generally Accepted Accounting Principles (GAAP)
Accounting guidelines, formulated by the Financial Accounting Standards Board, that govern how accounting is practical.
Going-Concern Concept
Holds that the entity will remain in operation for the foreseeable future.
Income Statement
A financial statement listing an entity's revenues, expenses, and net income or net loss for a specific period. Also called the statement of operations.
Investing Activities
Activities that increase or decrease the long-term assets available to the business; a section of the statment of cash flows.
An economic obligation (a debt) payable to an individual or an organization outside of the business.
Long-Term Debt
A liability that falls due beyond one year from the date of the financial statements.
Management Accounting
The branch of accounting that generates information for the internal decision makers of a business, such as top executives.
Merchandise Inventory
The merchandise that a company sells to customers.
Operating Activities
Activities that create revenue or expense in the entity's major line of business; a section of the statement of cash flows. Operating activites affect the income statement.
Net Income
Excess of total revenues over total expenses.
Owner's equity
The claim of the owners of a business to the assets of the business.
Paid-in capital
The amount of stockholders' equity that stockholders have contributed to the corporation.
An association of tow or more persons who co-own a business for profit.
Plant assets
Long-lived assets, such as land, buildings, and equipent, used in the operation of the business.
Property, Plant, Management
Long-lived assets, such as land, buildings. and equipment, used in operation of the business.
A business with a single owner.
Reliability Principle
The accounting principle that ensures that accounting records and statements are based on the most reliable data available.
Retained Earnings
The amount of stockholders' equity that the corporation has earned through profitable operation and has not given back to the stockholders.
Increase in retained earnings from delivering goods or services to customers or clients.
Shares in which the owners' equity of a corporation is divided.
Stable-Monetary-Unit Concept
The basis for ignoring the effect of inflation in the accounting records, based on the assumption that the dollar's purchasing power is relatively stable.
Statement of Cash Flows
Reports cash reciepts and cash payments classified according to the entity's major activites: operating, investing, and financing.
A person who owns stock in a corporation,
Stockholder's Equity
The stockholders' ownership interest in the assets of a corporation.
Statement of Retained Earnings
Summary of the changes in all categories of stockholder's equity during the period.