Accounting Chapter 1

Front 1

What is accounting?

Back 1

an information system that measures business activities, processes data into reports, and communicates results to people.

Front 2

Fianacial Statement

Back 2

Business documents that report financial information about a business entity to decision makers.

Front 3

Who uses Accounting Information? (4 answers)

Back 3

Individuals
Investors and Creditors
Taxing Authorities
Non Profit Organizations

Front 4

Financial Accoutning

Back 4

provides information to people outside of the firm

Front 5

Management accounting

Back 5

generates inside information for the internal decision makers of a business

Front 6

Proprietorship

Back 6

A business with a single owner

Front 7

Partnership

Back 7

An association of two or more persons who co-own a business for profit

Front 8

Corporation

Back 8

A business owned by stockholders. A legal entity, "artificial person" in the eyes of the law.

Front 9

Stockholders

Back 9

A person that owns stock in a corporation

Front 10

Stock

Back 10

Shares in which owners equity of a corporation is divided.

Front 11

Board of Directors

Back 11

group elected by the stockholders to set policies for a corporation and to appoint officers.

Front 12

Entity

Back 12

organization or a section of an organization that stands apart from other organizations and individuals as a seperate economic unit.

Front 13

Reliability Principle aka Objectivity principle

Back 13

ensures that accounting records and statements are based on the most reliable data available.