Management 1010 Test 2

Front 1

accounting

Back 1

comprehensive system for collecting, analyzing, and communicationg financial information

Front 2

bookkeeping

Back 2

recording of accounting transactions

Front 3

accounting information system

Back 3

organized procedure for identifying, measuring, recording, and retaining financial information for use in accounting statements and management reports

Front 4

controller

Back 4

person who manages all of a firm's accounting activities

Front 5

financial accounting

Back 5

field of accounting concerned with external users of a company's financial information

Front 6

managerial accounting

Back 6

field of accounting that serves internal users of a company's financial information

Front 7

certified public accountant

Back 7

accountant licensed by the state and offering services to the public

Front 8

audit

Back 8

systematic examination of a company's accounting system to determine whether its financial reports reliably represent its operations

Front 9

generally accepted accounting principles

Back 9

accounting guidelines that govern the content and form of financial reports

Front 10

tax services

Back 10

assistnace provided by CPAs for tax preparation and tax planning

Front 11

management advisory services

Back 11

assistance provided by CPA firms in areas such as financial planning, information systems design, and other areas of concern for client firms

Front 12

core competencies for accounting

Back 12

the combination of skills, technology, and knowledge that will be necessary for the future CPA

Front 13

private accountant

Back 13

salaried accountant hired by a business to carry out its day-to-day financial activities

Front 14

management accountant

Back 14

private accountant who provides financial services to support managers in various business activities within a firm

Front 15

certified management accountant

Back 15

professional designation awarded by the institute of management accountants in recognition of management accounting qualifications

Front 16

forensic accounting

Back 16

the practice of accounting for legal purposes

Front 17

certified fraud examiner

Back 17

professional designation administered by the association of certified fraud examiners in recognition of qualifications for a specialty area within forensic accounting

Front 18

sarbanes-oxley act of 2002

Back 18

enactment of federal regulations to restore public trust in accounting practices by imposing new requirements on financial activities in publicly traded corporations

Front 19

accounting equation

Back 19

assets= liabilities + owners' equity; used by accountants to balance data for the firm's financial transactions at various points in the year

Front 20

asset

Back 20

any economic resource expected to benefit a firm or an individual who owns it

Front 21

liability

Back 21

debt owed by a firm to an outside organization or individual

Front 22

owners' equity

Back 22

amount of money that owners would receive if they sold all of a firm's assets and paid all of its liabilities

Front 23

financial statement

Back 23

any of several types of reports summarizing a company's financial status to stakeholders and to aid in managerial decision making

Front 24

balance sheet

Back 24

financial statement that supplies detailed information about a firm's assets, liabilities, and owners' equity

Front 25

current asset

Back 25

asset that can or will be converted into cash within a year

Front 26

liquidity

Back 26

case with which an asset can be converted into cash

Front 27

fixed asset

Back 27

asset with long-term use or value, such as land, buildings, and equipment

Front 28

depreciation

Back 28

accounting method for distributing the cost of an asset over its useful life

Front 29

intangible asset

Back 29

nonphysical asset, such as a patent or trademark, trhat has economic value in the form of expected benefit

Front 30

goodwill

Back 30

amount paid for an existing business above the value of its other assets

Front 31

current liability

Back 31

debt that must be paid within one year

Front 32

accounts payable

Back 32

current liability consisting of bills owed ot suppliers, plus wages and taxes due within the coming year

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long-term liability

Back 33

debt that is not due for at least one year

Front 34

paid-in capital

Back 34

money that is invested in a company by its owners

Front 35

retained earnings

Back 35

earnings retained by a firm for its use rather than paid out as dividends

Front 36

income statement

Back 36

financial statement listing a firm's annual revenues and expenses so that a bottom line shows annual profit or loss

Front 37

revenues

Back 37

funds that flow into a business from the sale of goods or services

Front 38

cost of revenues

Back 38

costs that a company incurs to obtain revenues from other companies

Front 39

cost of goods sold

Back 39

costs of obtaining materials for making the products sold by a firm during the year

Front 40

gross profit

Back 40

a preliminary, quick-to-calculate profit figure calculated from the firm's revenues minus its cost of revenues

Front 41

operating expenses

Back 41

costs, other than the cost of revenues, incurred in producing a good or service

Front 42

operating income

Back 42

gross profit minus operating expenses

Front 43

net income

Back 43

gross profit minus operating expenses and income taxes

Front 44

statement of cash flows

Back 44

financial statement describing a firm's yearly cash receipts and cash payments

Front 45

budget

Back 45

detailed statement of estimated receipts and expenditures for a future period of time

Front 46

revenue recognition

Back 46

formal recording and reporting of revenues at the appropriate time

Front 47

full disclosure

Back 47

guideline that financial statements should not include just numbers but should also furnish management's interpretations and explanations of those numbers

Front 48

solvency ratio

Back 48

financial ratio for measuring a firm's potential earnings

Front 49

activity ratio

Back 49

financial ratio for evaluating management's efficiency in using a firm's assets

Front 50

short-term solvency ratio

Back 50

financial ratio for measuring a company's ability to pay immediate debts

Front 51

current ratio

Back 51

financial ratio for measuring a company's ability to pay current debts out of current assets

Front 52

debt

Back 52

a company's total liabilities

Front 53

leverage

Back 53

ability to finance an investment through borrowed funds

Front 54

earnings per share

Back 54

profitability ratio measuring the net profit that the company earns for each share of outstanding stock

Front 55

code of professional conduct

Back 55

the code of ethics for CPAs as maintained and enforced by the AICPA

Front 56

securities

Back 56

stocks, bonds, and mutual funds representing secured, or asset-based, claims by investors against issuers

Front 57

securities markets

Back 57

the markets in which stocks and bonds are sold

Front 58

primary securities market

Back 58

market in which new stocks and bonds are bought and sold

Front 59

securities and exchange commission

Back 59

federal agency that administers US securities laws to protect the investing public and maintain smoothly functioning markets

Front 60

investment bank

Back 60

financial institutions engaged in issuing and reselling new securities

Front 61

secondary securities market

Back 61

market in which existing stocks and bonds are traded

Front 62

stock

Back 62

a portion of ownership of a corporation

Front 63

common stock

Back 63

the most basic form of ownership, including voting rights on major issues, in a company

Front 64

dividend

Back 64

a payment to shareholders, on a per-share basis, out of the company's earnings

Front 65

par value

Back 65

face value of share of stock, set by the issuing company's board of directors

Front 66

market value

Back 66

current price of a share of stock in the stock market

Front 67

book value

Back 67

value of a common stock expressed as total stockholders' equity divided by the number of shares of stock

Front 68

blue-chip stock

Back 68

common stock issued by a well-established and respected company with a sound financial history and a stable pattern of dividend payouts

Front 69

preferred stock

Back 69

stock shares that have preference, or priority, over common shares when dividends are distributed

Front 70

capital gains

Back 70

the earnings, reflecting changes in market value, from buying and selling a share of stock

Front 71

market appreciation

Back 71

the change in market values for a share of stock at two points in time

Front 72

stock exchange

Back 72

organization of individuals formed to provide an institutional setting in which stock can be traded

Front 73

stock broker

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individual or organization who receives and executes by-and-sell orders on bbehalf of other people in return for commissions

Front 74

initial public offering

Back 74

the first sale of a company's stock to the general public

Front 75

over-the-counter market

Back 75

organization of securities dealers formed to trade stock outside the formal institutional setting of the organized stock exchanges

Front 76

national association of securities dealers automated quotation

Back 76

world's oldest electronic stock market consisting of dealers who buy and sell securities over a network and electtronic communications

Front 77

bond

Back 77

security through which an issuer promises to pay the buyer a certain amount of money by a specified future date

Front 78

government bond

Back 78

bond issued by the federal government

Front 79

municipal bond

Back 79

bond issued by a state or local government

Front 80

corporate bond

Back 80

bond issued by a company as a source of long-term funding

Front 81

registered bond

Back 81

bond bearing the name of the holder and registered with the issuing company

Front 82

bearer bond

Back 82

bond requiring the holder to clip and submit a coupon to receive an interest payment

Front 83

secured bond

Back 83

bond backed by pledges of assets to the bbond holders

Front 84

debenture

Back 84

unsecured bond for which no specific property is pledged as security

Front 85

mutual fund

Back 85

company that pools cash investments from individuals and organizations to purchase a porfolio of stocks, bonds, and other securities

Front 86

portfolio

Back 86

the combined holdings of all the financial assets of any company or individual

Front 87

no-load fund

Back 87

mutual fund in which investors pay no sales commissions when they buy in or sell out

Front 88

load fund

Back 88

mutual fund in which investors are charged sales commissions when they buy in or sell out

Front 89

risk-return relationship

Back 89

the principle that safer investments tend to offer lower returns, while riskier investments tend to offer higher returns

Front 90

diversification

Back 90

purchase of several different kinds of investments rather than just one

Front 91

asset allocation

Back 91

relative amount of funds invested in each of several investment alternatives

Front 92

price-earningns ratio

Back 92

current price of a stock divided by the firm's current annual earnings per share

Front 93

net asset value

Back 93

current market value of one share

Front 94

market index

Back 94

summary of price trends in a specific industry and/or the stock market as a whole

Front 95

bull market

Back 95

period of rising stock prices

Front 96

bear market

Back 96

period of falling stock prices

Front 97

dow jones industrial average

Back 97

market index based on the prices of 30 of the largest industrial firms listed on the NYSE

Front 98

standard and poor's composite index

Back 98

market index based on the performance of 400 industrial firms, 40 utilities, 40 financial institutions, and 20 transportation companies

Front 99

nasdaq composite index

Back 99

value-weighted market index that includes all NASDAQ-listed companies, both domestic and foreign

Front 100

market order

Back 100

order to buy or sell a security at the market price prevailing at the time the order is placed

Front 101

limit order

Back 101

order authorizing the purchase of a stock only if its price is equal to or less than a specified amount

Front 102

stop order

Back 102

order authorizing the sale of a stock if its price falls to or below a specified level

Front 103

round lot

Back 103

purchase or sale of stocks in units of 100 shares

Front 104

odd lot

Back 104

fraction of a round hat

Front 105

margin

Back 105

percentage of the total sales price that a buyer must put up to place an order for buying stock

Front 106

short sale

Back 106

stock sale in which an investor borrows securities from a broker to be sold and then replaced at a specified future date

Front 107

national association of securities dealers

Back 107

the largest private-sector, securities-regulation organization in the world

Front 108

program trading

Back 108

large purchase or sale of a group of stocks, often triggered by computerized trading programs that can be launched without human supervision or control

Front 109

prospectus

Back 109

registration statement filed with the SEC before the issuance of a new security

Front 110

insider trading

Back 110

illegal practice of using special knowledge about a firm for profit or gain

Front 111

blue-sky laws

Back 111

laws requiring securities dealers to licensed and registered with the states in which they do business