Exam 2

Front 1

Accounting

Back 1

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

Front 2

accounting cycle

Back 2

A six-step procedure that results in the preparation and analysis of the major financial statements.

Front 3

accounts payable

Back 3

Current liabilities involving money owed to others for merchandise or services purchased on credit but not yet paid for.

Front 4

annual report

Back 4

A yearly statement of the financial condition, progress, and expectations of an organization.

Front 5

Assets

Back 5

Economic resources (things of value) owned by a firm.

Front 6

Auditing

Back 6

The job of reviewing and evaluating the records used to prepare a company's financial statements.

Front 7

balance sheet

Back 7

The financial statement that reports a firm's financial condition at a specific time.

Front 8

bonds payable

Back 8

Long-term liabilities that represent money lent to the firm that must be paid back.

Front 9

Bookkeeping

Back 9

The recording of business transactions.

Front 10

cash flow

Back 10

The difference between cash coming in and cash going out of a business.

Front 11

certified internal auditor (CIA)

Back 11

An accountant who has a bachelor's degree and two years of experience in internal auditing, and who has passed an exam administered by the Institute of Internal Auditors.

Front 12

certified management accountant (CMA)

Back 12

A professional accountant who has met certain educational and experience requirements, passed a qualifying exam in the field, and been certified by the Institute of Certified Management Accountants.

Front 13

certified public accountant

Back 13

An accountant who passes a series of examinations established by the American Institute of Certified Public Accountants (AICPA).

Front 14

cost of goods sold/cost of goods manufactured

Back 14

A measure of the cost of merchandise sold or cost of raw materials and supplies used for producing items for resale.

Front 15

current assets

Back 15

Items that can or will be converted into cash within one year.

Front 16

depreciation

Back 16

The systematic write-off of the cost of a tangible asset over its estimated useful life.

Front 17

double entry bookkeeping

Back 17

The concept of writing every business transaction in two places.

Front 18

financial accounting

Back 18

Accounting information and analyses prepared for people outside the organization.

Front 19

financial statement

Back 19

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

Front 20

fixed assets

Back 20

Assets that are relatively permanent, such as land, buildings, and equipment.

Front 21

fundamental accounting equation

Back 21

Assets _ Liabilities _ Owners _ equity; this is the basis for the balance sheet.

Front 22

government and not for profit accounting

Back 22

Accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duly approved budget.

Front 23

gross profit/gross margin

Back 23

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

Front 24

income statement

Back 24

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.

Front 25

independent audit

Back 25

An evaluation and unbiased opinion about the accuracy of a company's financial statements.

Front 26

intangible assets

Back 26

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

Front 27

journal

Back 27

The record book or computer program where accounting data are first entered.

Front 28

ledger

Back 28

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.

Front 29

liabilities

Back 29

What the business owes to others (debts).

Front 30

liquidity

Back 30

How fast an asset can be converted into cash.

Front 31

managerial accounting

Back 31

Accounting used to provide information and analyses to managers within the organization to assist them in decision making.

Front 32

net income/net loss

Back 32

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

Front 33

notes payable

Back 33

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

Front 34

operating expenses

Back 34

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

Front 35

owner's equity

Back 35

The amount of the business that belongs to the owners minus any liabilities owed by the business.

Front 36

private accountant

Back 36

An accountant who works for a single firm, government agency, or nonprofit organization.

Front 37

public accountant

Back 37

An accountant who provides his or her accounting services to individuals or businesses on a fee basis.

Front 38

ratio analysis

Back 38

The assessment of a firm's financial condition and performance through calculations and interpretations of financial ratios developed from the firm's financial statements.

Front 39

retained earnings

Back 39

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

Front 40

statement of cash flows

Back 40

Financial statement that reports cash receipts and disbursements related to a firm's three major activities: operations, investments, and financing.

Front 41

tax accountant

Back 41

An accountant trained in tax law and responsible for preparing tax returns or developing tax strategies.

Front 42

trial balance

Back 42

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