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28 Cards in this Set
- Front
- Back
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sole proprietorship
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operated by one invidual |
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Partnership |
profits, taxes, and legal liability are responsibly of two or more owners instead of just one |
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corporation
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legally responsible for its own debt and taxes |
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limited liability company
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sole proprietorship partnership corporation |
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how do companies earn profit for their stockholders?
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selling goods or services to customers for more money.
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accounting |
information system designed by an organization to analyze, record, and summarize |
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financial |
investors |
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Managerial
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supervisors |
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financial statement |
activities |
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four main group of external users
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investors directors goverment |
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basic accounting equation
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ASSETS= LIBILITY + STOCKHOLDERS' EQUITY |
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ASSETS |
ECONOMIC RESOURCE PRESENTLY CONTROLLED BY THE COMPANY |
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Liabilities |
measurable amounts that the company owes creditors |
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Stockholder's equity |
represent owners' claimed business |
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Retained earnings equation |
- expenses ____________ net income |
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dividends |
a company's profit are accumulated in retained earnings until a decision is made to distribute them to stockholders |
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financial statements
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retained earnings balance sheet statement cash flow |
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income statement
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reports the amount of revenues less expenses for a period of time |
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statement of retained earnings |
reports the way that net income and the distribution of dividends affected the financial position of the company during the period |
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balance sheets
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reports the amount of assets, liabilities, and stockholder equity of business at a point in time. |
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cash flow |
reports operating, investing, and financial activities that caused increases and decreases in cash during the period |
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GAAP
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General accepted accounting principle |
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what is the main goal of GAAP AND IFRS?
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to ensure companies produce financial information that is useful
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what makes a difference in decision making that is relevant in it's faithful representation?
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economic substance of the business activities |
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Ethic
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refers to standard of conduct for judging right from wrong, honest from dishonesty, and fair from unfair. |
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Code of professional conduct |
To help ensure these decisions are made in a professional/ ethical manner. |
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internal controls |
to protect the company or office right away |
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ethical dilemma |
identify and evaluate the alternative course of action choose the alternative that is most ethical |
