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34 Cards in this Set
- Front
- Back
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Accounts Payable |
Amounts a business must pay in the future |
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Accounts receivable |
Claims for future collection from customers |
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Assets |
Property owned by a business |
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Balance sheet |
A formal report of a business's financial condition on a certain date; reports the assets, liabilities, and owner's equity of the business |
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Break even |
A point at which revenue equals expenses |
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Business transaction |
A financial event that changes the resources of a firm |
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Capital |
Finacial investment in a business; equity |
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Equity |
An owner's financial interest in a business |
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Expense |
An outflow of cash, use of other assets, or incurring liability |
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Fair market value |
The current worth of an asset or the price the asset would bring if sold on the open market |
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Fundamental accounting equation |
The relationship between assets and liabilities plus owner's equity |
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Income statement |
A formal report of business operations covering a specific period of time; also called a profit and loss statement or a statement of income and expenses |
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Liabilities |
Debts or obligations of a business |
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Net income |
The result of an excess of revenue over expenses |
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Net loss |
The result of an excess of expenses over revenue |
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On account |
An arrangement to allow payment at a later date; also called charge account or open account |
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Owner's equity |
The financial interest of the owner of a business; alsi called proprietorship or net worth |
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Revenue |
An inflow of money or other assets that results from the sales of goods or services or from the use of money or property; also called income |
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Statement of owner's equity |
A formal report of changes that occurred in the owner's financial interest during a reporting period. |
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Withdrawals |
Funds taken from the business by the owner for personal use. |
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Accounting |
The process by which financial information about a business is recorded, classified, summarized, intrepreted, and communicated to owners, managers, and other interested parties. |
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Accounting system |
A process designed to accumulate, classify, and summerize financial data. |
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Auditing |
The review of financial statements to assess their fairness and adherence to generally accepted accounting principles. |
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Auditor's report |
An independent accountant's review of a firm's financial statements |
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Certified public accountant (CPA) |
An independent accountant who provides accounting services to the public for a fee |
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Corporation |
A publicly or privately owned business entity that is separate from its owners and has a legal right to own property and do business in its own name; stockholders are not responsible fir the debts or the taxes of the business. |
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Creditor |
One to whom money is owed |
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Discussion memorandum |
An explanation of a topic under consideration by the Financial Accounting Standards Board |
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Economic entity |
A business or organization whose major purpose is to produce a profit for its owners |
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Entity |
Anything having its own separate identity, such as an individual, a town, a university, or a business |
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Exposure draft |
A proposed solution to a problem being considered by the Financial Accounting Standards Board |
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Financial statements |
Periodic reports of a firm's position or operating results |
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Generally Accepted Accounting Principles (GAAP) |
Accounting Standards developed and applied by professional accountants |
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Governmental accounting |
Accounting work performed for a federal, state, or local government unit |
