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16 Cards in this Set
- Front
- Back
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accounting
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The information system that measures business activities, processes that information into reports and financial statements, and communicates the results to decision makers.
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accounting equation
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The most basic tool of accounting: Assets = Liabilities + Owners' Equity.
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corporation
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A business owned by stockholders. A corporation is a legal entity, an "artifical person" in the eyes of the law.
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cost principle
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Principle that states that assets and services should be recorded at their actual cost.
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dividends
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Distributions (usually cash) by a corporation to its stockholders.
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entity
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An organization or a section of an organization that, for accounting purposes, stands apart from other organizations and individuals as a separate economic unit.
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financial accounting
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The branch of accounting that provides information to people outside the firm.
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generally accepted accounting principles (GAAP)
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Accounting guidelines, formulated by the Financial Accounting Standards Board, that governs how accounting is practiced.
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going-concern concept
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Holds that the entity will remain in operation for the forseeable future.
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partnership
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An association of 2 or more persons who co-own a business for profit.
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proprietorship
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A business with a single owner.
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reliability principle
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The accounting principle that ensures that accounting records and statements are based on the more reliable data available. Alse called the objectivity principle.
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shareholder
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Another name for stockholder.
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stable-monetary-unit concept
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The reason for ignoring the effect of inflation in the accounting records, based on the assumption that the dolar's purchasing power is relatively stable.
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stock
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Shares into which the owners' equity of a corporation is divided.
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stockholders
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A person who owns stock in a corporation. Also called a shareholder.
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