Flash Cards For Chapters 17,18,19,20

Front 1

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

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MANAGERIAL ACCOUNTING

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

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CERTIFIED MANAGEMENT ACCOUNTANT (CMA)

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accounting information and analyses prepared for people outside the organization

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Financial accounting

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

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Annual Report

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

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private accountant

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

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public accountant

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an accountant who passes a series of examinations established by the American Institute of Certified Public ccountants (AICPA)

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Certified public accountant
(CPA)

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

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auditing

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

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independent audit

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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

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Certified Internal Auditor
(CIA)

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

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tax accountant

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

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government and not-for-profit accounting

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

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accounting cycle

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the recording of business transactions

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bookkeeping

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

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journal

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the practice of writing every business transaction in two places

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Double-Entry bookkeeping

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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 al the information about one account in the same place

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ledger

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a summary of all the financial data in data in the account ledgers that ensures the figures are correct and balanced

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trial balance

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

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financial statement

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assets= Liabilities + Owners' equity; this is the basis for the balance sheet

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fundamental accounting equation

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financial statement that reports a firm's financial condition at a specific time and is composed of three major accounts: assets, liabilities, and owners equity.

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balance sheet

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economic resources (things of value) owned by a firm

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assets

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the ease with which an asset can be converted into cash

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liquidity

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items that can or will be converted into cash within one year

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current assets

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

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fixed assets

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

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intangible assets

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what the business owes to others (debts).

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Liabilities

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current liabilities are bills the company owes to others for merchandise or services purchased on credit but not yet paid for.

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accounts payable

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

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notes payable

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

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bonds payable

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

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owners' equity

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the accumulated earnings from a firms profitable operations that were reinvested in the business and not paid out to stockholders in dividends

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retained earnings

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

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income statement

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

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net income or net loss

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

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cost of goods sold (or cost of goods manufactured)

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

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gross profit (or gross margin)

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

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operating expenses

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

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Depreciation

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

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statement of cash flows

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

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cash flow

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the assessment of a firm's financial condition using calculations and interpretations of financial ratios developed from the firm's financial statements

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ratio analysis

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the function in a business that acquires funds for the firm and manages those funds within the firm

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finance

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the job of managing a firm's resources so it can meet its goals and objectives

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financial management

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managers who examine financial data prepared by accountants and recommend strategies for improving the financial performance of the firms

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financial managers