Chapter 17

Front 1

the recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested parties with the information they need to make good decisions

Back 1

Accounting

Front 2

is accounting used to provide information and analyses to managers within the organization to assist them in decision making

Back 2

Managerial Accounting

Front 3

accounting information and analyses prepared for people outside the organization (owners and prospective owners, creditors and lenders, employee unions, customers, suppliers, governmental units, and the general public)

Back 3

Financial Accounting

Front 4

is an accountant who works for a single firm, government agency, or nonprofit organization

Back 4

Private Accountant

Front 5

is an accountant who provides his or her accounting services to individuals or businesses on a fee basis

Back 5

Public Accountant

Front 6

is an accountant who has passed a series of examinations established by the American Institute of Certified Public Accountants (AICPA).

Back 6

Certified Public Accountant (CPA)

Front 7

is the job of reviewing and evaluating the records used to prepare the company’s financial statements

Back 7

Auditing

Front 8

is an evaluation and unbiased opinion about the accuracy of company’s financial statements.

Back 8

Independent Audit

Front 9

is an accountant trained in tax law and responsible for preparing tax returns and developing tax strategies.

Back 9

Tax Accountant

Front 10

is the recording of business transactions

Back 10

Bookkeeping

Front 11

is the record book or computer program where accounting data are first entered

Back 11

Journal

Front 12

is the concept of writing every business transaction in two places

Back 12

Double-Entry Bookkeeping

Front 13

a specialized accounting book or computer program in which information from accounting journals is accumulated into specific categories and posted so that managers can find all the information about one account in the same place

Back 13

Ledger

Front 14

a summary of all the data in the account ledgers to show whether the figures are correct and balanced

Back 14

Trial Balance

Front 15

is the summary of all transactions that have occurred over a particular period

Back 15

Financial Statement

Front 16

the financial statement that reports a firm’s financial condition at a specific time

Back 16

Balance Sheet

Front 17

are economic resources (things of value) owned by the company

Back 17

Assets

Front 18

refers to how fast an asset can be converted into cash

Back 18

Liquidity

Front 19

are the items that can or will be converted to cash within one year

Back 19

Current Assets

Front 20

are assets that are relatively permanent, such as land, buildings, and equipment

Back 20

Fixed Assets

Front 21

long-term assets (e.g., patents, trademarks, copyrights) that have no real physical form but do have value

Back 21

Intangible Assets

Front 22

are what the business owes to others

Back 22

Liabilities

Front 23

current liabilities involving money owed for merchandise and services purchased on credit but not paid for yet

Back 23

Accounts Payable

Front 24

short-term or long-term liabilities that a business promises to repay by a certain date

Back 24

Notes Payable

Front 25

are long-term liabilities that represent money lent to the firm that must be paid back

Back 25

Bonds Payable

Front 26

the amount of the business that belongs to the owners minus any liabilities owned by the business

Back 26

Owners’ Equity

Front 27

the accumulated earnings from a firm’s profitable operations that were kept in the business and not paid out to stockholders in dividends

Back 27

Retained Earnings

Front 28

the financial statement that shows a firm’s profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm, and the resulting net income

Back 28

Income Statement

Front 29

revenue left over after all costs and expenses, including taxes, are paid

Back 29

Net Income or Net Loss

Front 30

the value of what is received for goods sold, services rendered, and other financial sources

Back 30

Revenue

Front 31

how much a firm earned by buying (or making) and selling merchandise

Back 31

Gross Profit (Gross Margin)

Front 32

costs involved in operating a business, such as rent, utilities, and salaries

Back 32

Operating Expenses

Front 33

the systemic write-off of the cost of a tangible asset over its estimated useful life

Back 33

Depreciation

Front 34

the difference between cash coming in and cash going out of a business

Back 34

Cash Flow