Mgmt Ch 16

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

financial transactions

Back 2

buying and selling goods and services, acquiring insurance, paying employees, and using supplies

Front 3

accounting system

Back 3

the method used to record and summarize accounting data into reports

Front 4

managerial accounting

Back 4

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

Front 5

financial accounting

Back 5

accounting information an analysis prepared for people the organization

Front 6

annual report

Back 6

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

Front 7

Chartered Accountant (CA)

Back 7

an accountant who has met the examination, education, and experience requirements of the CA profession

Front 8

certified management accountant (CMA)

Back 8

An accountant who as met the examination, education and experience requirements of the Society of Management Accountants of Canada

Front 9

Certified general accountants (CGAs)

Back 9

An accountant who has met the examination, education, and experience requirements of the Certified General Accountants Association of Canada

Front 10

private accountant

Back 10

an accountant who works for a single firm, government agency or non-profit organization

Front 11

public accountant

Back 11

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

Front 12

compliance

Back 12

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

Front 13

independent audit

Back 13

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

Front 14

tax accountant

Back 14

trained in tax law and is responsible for preparing tax returns or developing tax strategies

Front 15

accounting cycle

Back 15

a six-step procedure that results in the preparation and analysis of the two major financial statements: the balance sheet and the income statement

Front 16

the 6 steps of the accounting cycle

Back 16

1. analyze source documents
2. record transactions in journals
3. transfer journal entries to ledger
4. take a trial balance
5. prepare financial statements
6. analyze financial statements

Front 17

bookkeeping

Back 17

the recording of business transactions

Front 18

journal

Back 18

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

Front 19

double-entry bookkeeping

Back 19

the concept of writing every business transaction in two places

Front 20

Fundamental accounting equation

Back 20

assets=liabilities+owners' equity; this is the basis for the balance sheet

Front 21

ledger

Back 21

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 22

trial balance

Back 22

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

Front 23

financial statement

Back 23

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

Front 24

balance sheet

Back 24

the financial statement that reports a firm's financial conditions at a specific time
- composed of assets, liabilities and owner's equity

Front 25

assets

Back 25

economic resources owned by a firm

Front 26

liquidity

Back 26

how fast an asset can be converted into cash

Front 27

current assets

Back 27

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

Front 28

capital assets

Back 28

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

Front 29

intangible assets

Back 29

long-term assets that have no real physical form but do have value

Front 30

liabilities

Back 30

what the business owes to others

Front 31

accounts payable

Back 31

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

Front 32

notes payable

Back 32

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

Front 33

bonds payable

Back 33

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

Front 34

taxes payable

Back 34

sales tax and GST collected, and income tax payable

Front 35

equity

Back 35

the value of things you own (assets) minus the amount of money you owe others (liabilities)

Front 36

the owners' equity

Back 36

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

Front 37

income statement

Back 37

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 of the resources that have left the firm, and the resulting net income

Front 38

net income or net loss

Back 38

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

Front 39

revenue

Back 39

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

Front 40

cost of goods sold (or cost of goods manufactured)

Back 40

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

Front 41

gross profit (gross margin)

Back 41

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

Front 42

operating expenses

Back 42

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

Front 43

cash flow statement

Back 43

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

Front 44

cash flow

Back 44

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

Front 45

amortization

Back 45

the systematic writeoff of the cost of a tangible asset over its estimated useful life

Front 46

first in, first out (FIFO)

Back 46

an accounting method for calculating cost of inventory; it assumes that the first goods to come in are the first to go out

Front 47

last in, first out (LIFO)

Back 47

an accounting method for calculating cost of inventory; it assumes that the last goods to come in are the first to go out

Front 48

ratio analysis

Back 48

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