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34 Cards in this Set
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the recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested parties with the information they need to make good decisions
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Accounting
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is accounting used to provide information and analyses to managers within the organization to assist them in decision making
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Managerial Accounting
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accounting information and analyses prepared for people outside the organization (owners and prospective owners, creditors and lenders, employee unions, customers, suppliers, governmental units, and the general public)
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Financial Accounting
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is an accountant who works for a single firm, government agency, or nonprofit organization
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Private Accountant
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is an accountant who provides his or her accounting services to individuals or businesses on a fee basis
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Public Accountant
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is an accountant who has passed a series of examinations established by the American Institute of Certified Public Accountants (AICPA).
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Certified Public Accountant (CPA)
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is the job of reviewing and evaluating the records used to prepare the company’s financial statements
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Auditing
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is an evaluation and unbiased opinion about the accuracy of company’s financial statements.
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Independent Audit
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is an accountant trained in tax law and responsible for preparing tax returns and developing tax strategies.
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Tax Accountant
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is the recording of business transactions
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Bookkeeping
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is the record book or computer program where accounting data are first entered
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Journal
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is the concept of writing every business transaction in two places
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Double-Entry Bookkeeping
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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
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Ledger
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a summary of all the data in the account ledgers to show whether the figures are correct and balanced
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Trial Balance
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is the summary of all transactions that have occurred over a particular period
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Financial Statement
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the financial statement that reports a firm’s financial condition at a specific time
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Balance Sheet
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are economic resources (things of value) owned by the company
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Assets
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refers to how fast an asset can be converted into cash
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Liquidity
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are the items that can or will be converted to cash within one year
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Current Assets
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are assets that are relatively permanent, such as land, buildings, and equipment
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Fixed Assets
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long-term assets (e.g., patents, trademarks, copyrights) that have no real physical form but do have value
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Intangible Assets
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are what the business owes to others
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Liabilities
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current liabilities involving money owed for merchandise and services purchased on credit but not paid for yet
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Accounts Payable
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short-term or long-term liabilities that a business promises to repay by a certain date
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Notes Payable
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are long-term liabilities that represent money lent to the firm that must be paid back
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Bonds Payable
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the amount of the business that belongs to the owners minus any liabilities owned by the business
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Owners’ Equity
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the accumulated earnings from a firm’s profitable operations that were kept in the business and not paid out to stockholders in dividends
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Retained Earnings
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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 the resources that have left the firm, and the resulting net income
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Income Statement
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revenue left over after all costs and expenses, including taxes, are paid
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Net Income or Net Loss
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the value of what is received for goods sold, services rendered, and other financial sources
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Revenue
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how much a firm earned by buying (or making) and selling merchandise
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Gross Profit (Gross Margin)
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costs involved in operating a business, such as rent, utilities, and salaries
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Operating Expenses
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the systemic write-off of the cost of a tangible asset over its estimated useful life
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Depreciation
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the difference between cash coming in and cash going out of a business
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Cash Flow
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