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37 Cards in this Set
- Front
- Back
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Accounting |
The information system that identifies, records, and communicates the economic events of an organization to interested users |
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Assets |
Resources a business owns |
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Balance Sheet |
A financial statement that reports the assets, liabilities, and stockholders' equity at a specific date |
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Basic accounting equation
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Assets= Liabilities+ Stockholders' Equity
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Bookkeeping |
A part of accounting that involves only the recording of economic events
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Common Stock |
Term used to describe the total amount paid in by stockholders for the shares they purchase
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Convergence
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The process of reducing the differences between U.S. GAAP and IFRS
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Corporation
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A business organized as a separate legal entity under state corporation law, having ownership divided into transferable shares of stock
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Dividend
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A distribution by a corporation to its stockholders
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Economic entity assumption |
An assumption that requires that the activities of the entity be kept separate and distinct from the activities of its owner and all other economic entities
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Ethics |
The standards of conduct by which one's actions are judged as right or wrong, honest or dishonest, far or not fair |
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Expanded accounting equation |
Assets= Liabilities+Common Stock+ Revenues- Expenses- Dividends |
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Expenses |
The cost of assets consumed or services used in the process of earning revenue |
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Fair Value Principle |
An accounting principle stating that assets and liabilities should be reported at fair value (the price received to sell an asset or settle a liability). |
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Faithful representation |
Numbers and descriptions match what really existed or happened- they are factual |
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Financial accounting |
The field of accounting that provides economic and financial information for investors, creditors, and other external users |
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Financial Accounting Standards Board (FASB) |
A private organization that establishes generally accepted accounting principles in the United States (GAAP). |
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Generally accepted accounting principles (GAAP) |
Common standards that indicate how to report economic events |
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Historical cost principle |
An accounting principle that states that companies should record assets at their cost |
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Income statement |
A financial statement that presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time |
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International Accounting Standards Board (IASB) |
An accounting standard-setting body that issues standards adopted by many countries outside of the United States |
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International Financial Reporting Standards (IFRS) |
International accounting standards set by the International Accounting Standards Board (IASB). |
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Liabilities |
Creditor claims against the total assets |
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Managerial accounting |
The field of accounting that provides internal reports to help users make decisions about their companies |
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Monetary unit assumption |
An assumption stating that companies include in the accounting records only transaction data that can be expressed in terms of money |
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Net income |
The amount by which revenues exceed expenses |
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Net loss |
The amount by which expenses exceed revenues |
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Partnership |
A business owned by two or more persons associated as partners |
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Proprietorship |
A business owned by one person |
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Relevance |
Financial information that is capable of making a difference in a decision |
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Retained earnings statement |
A financial statement that summarizes the changes in retained earnings for a specific period of time |
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Revenues |
The gross increase in stockholders' equity resulting from business activities entered into for the purpose of earning income |
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Sarbanes-Oxley Act (SOX) |
Law passed by Congress intended to reduce unethical corporate behavior |
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Securities and Exchange Commission (SEC) |
A governmental agency that oversees U.S. financial markets and accounting standard-setting bodies |
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Statement of cash flows |
A financial statement that summarizes information about the cash inflows (receipts) and cash outflows (payments) for a specific period of time |
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Stockholders' equity |
The ownership claim on a corporation's total assets |
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Transactions |
The economic events of a business that are recorded by accountants |
