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31 Cards in this Set

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  • Back
The process of identifying, recording, and communicating the economic events of a business to interested users of the information.
Annual Report:
A report prepared by corporate management that presents financial information including financial statements, notes, and the management discussion and analysis.
Resources owned by a business.
Auditor's Report:
A report prepared by an independent outside auditor stating the auditor's opinion as to the fairness of the presentation of the financial position and results of operations and their conformance with accepted accounting procedures.
Balance Sheet:
A financial statement that reports the assets, liabilities and stockholders' equity at a specific date.
Basic Accounting Equation:
Assets = Liabilities + Stockholder's equity.
Certified Public Accountant:
An individual who has met certain criteria and is thus allowed to perform audits of corporations.
Common Stock:
Stock representing the primary ownership interest in a corporation. In the balance sheet it represents the amount paid in by stockholders.
Comparative Statements:
A presentation of the financial statements of a company for multiples years.
A business organized as a separate legal entity having ownership divided into transferable shares of stock.
Cost Principle:
An accounting principle that states that assets should be recorded at their cost.
Cash or other assets from a corporation to its stockholders.
Economic Entity Assumption:
An assumption that economic events can be identified with a particular unit of accountability.
The cost of assets consumed or services used in ongoing operations to generate revenues.
Full Disclosure Principle:
Accounting principle that dictates that circumstances and events that make a difference to financial statement users should be disclosed.
Going Concern Assumption:
The assumption that the enterprise will continue in operation long enough to carry out its existing objectives and commitments.
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.
The debts and obligations of a business. Liabilities represent claims of creditors on the assets of a business.
Management Discussion and Analysis:
A section of the annual report that presents management's view on the company's short-term debt paying ability, expansion, financing, and results.
Monetary Unit Assumption:
An assumption stating that only transaction data that can be expressed in terms of money be included in the accounting records of the economic entity.
Net Income:
The amount by which revenues exceed expenses.
Net Loss:
The amount by which expenses exceed revenues.
Notes to the Financial Statement:
Notes that clarify information presented in the financial statements, as well as expand upon it where additional detail is needed.
A business owned by more than one person.
Retained Earnings:
The amount of net income kept in the corporation for future use, not distributed to stockholders as dividends.
Retained Earnings Statement:
A financial statement that summarizes the changes in retained earnings for a specific period of time.
The assets that result from the sale of a product or service.
Sole Proprietorship:
A business owned by one person.
Statement of Cash Flows:
A financial statement that provides information about the cash inflows (receipts) and cash outflows (payments) for a specific period of time.
Stockholders' Equity:
The stockholders' claim on total assets.
Time period assumption:
An accounting assumption that the economic life of a business can be divided into artificial time periods.