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18 Cards in this Set
- Front
- Back
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The process of identifying, measuring, recording, and communicating financial information
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Accounting
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Accounting that focuses on the needs of external decision-makers
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Financial accounting
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Sole Proprietorship
Partnership Corporation |
Three forms of business
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Owned by one person
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Sole proprietorship
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Jointly owned by two or more individuals
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Partnership
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Separate legal entity organized under the laws of a particular state
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Corporation
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Financing activities
Investing activities Operating activities |
Three activities of business
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Obtaining funds necessary to begin and operate a business
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Financing activities
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Buying the assets that enable a business to operate
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Investing activities
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The activities of a business that generate a profit
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Operating activities
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Captures all of the economic activities recorded by an accounting system
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Fundamental accounting equation
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The left side of the equation, economic resources of a company
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Assets
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The right side of the equation, the claims on the company's assets
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Liabilities and stockholders' equity
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Reports the assets, liabilities, and stockholders' equity at a specific point in time
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Balance sheet
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Reports how well a company has performed its operations over a period of time and provides information about the future profitability and growth of a company
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Income statement
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Reports how much of a company's income was retained in the business and how much was distributed to owners for a period of time
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Retained earnings statement
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Reports the sources of a company's cash inflow and the uses of a company's cash over time
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Statement of cash flow
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Relation of all the statements
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Start:
1 - Begin-Period Balance sheet 2 - Income statement 3 - Retained earnings statement 4 - End-Period Balance Sheet Statement of cash flow explains the change in cash from balance sheet to balance sheet |
