Accounting
The information system that measures business activities, processes the information into reports, and communicates the results to decision makers.
Financial Accounting
The field of accounting that focuses on providing information for external decision makers
Managerial Accouting
The field of accounting that focuses on providing information for internal decision makers
Creditor
Any person or business to whom a business owes money
Certified Public Accountants(CPAs)
Licensed professional accountants who serve the general public
Certified Management accountants(CMAs)
Certified professionals who specialize in accounting and financial management knowledge. They typically work for a single company.
Financial Accounting Standards Board(FASB)
The private organization that oversees the creation and governance of accounting standards in the United States
Securities and Exchange Commission(SEC)
U.S. governmental agency that oversees the U.S. financial markets
General Accepted Accounting Principles(GAAP)
Accounting guidelines, currently formulated by the Financial Accounting standards board; the main U.S. accounting rule book.
Economic Entity Assumption
An organization that stands apart as a separate economic unit
Stockholder
A person who owns stock in a corporation
Sole Proprietorship
A business with a single owner
Partnership
A business with two or more owners and not organized as a corporation
Corporation
a business organized under state law that is a separate legal entity
Limited-Liability Company (LLC)
A company in which each member is only liable for his or her own actions
Cost Principle
A principle that states that acquired assets and services should be recorded at their actual cost.
Going concern assumption
Assumes that the entity will remain in operation for the foreseeable future
Monetary Unit assumption
the assumption that requires the items on the financial statements to be measured in terms of a monetary unit
International Financial Reporting Standards(IFRS)
A set of global accounting guidelines, formulated by the international accounting standards board
International Accounting Standards Board(IASB)
The private organization that oversees the creation and governance of International Financial Reporting Standards
Audit
An examination of a company's financial statements and records
Sarbanes-Oxley Act(SOX)
Requires companies to review internal control and take responsibility for the accuracy and completeness of their financial reports
Assets
Economic resources that are expected to benefit the business in the future. Something the business owns or has control of
Liabilities
Debts that are owed to creditors
Equity
the owner's claim to the assets of the business
Contributed Capital
owners contributions to a corporation
Revenues
amount earned from delivering goods or services to customers
expenses
the cost of selling good or services
Dividend
a distribution of a corporation's earnings to stock holders
common stock
represents the basic ownership of a corporation
retained earnings
capital earned by profitable operations of a corporation that is not distributed to stockholders
net income
the result of operations that occur when total revenues are greater than total expenses
net loss
the result of operations that occur when total expenses are greater than total revenues
Transaction
an event that affects the financial position of the business and can be measured reliably in dollar amounts
Accounts payable
a short-term liability that will be paid in the future
accounts receivable
the right to receive cash in the future from customers for goods sold or for services preformed
Financial Statements
Business documents that are used to communicate information needed to make business decisions
income statement
reports the net income or net loss of the business for a specific period
statement of retained earnings
reports how the company's retained earnings balance changed from the beginning to the end of the period
balance sheet
reports on the assets, liabilities and stockholders' equity of the business as of a specific date
statement of cash flows
Reports on a business' cash receipts and cash payments for a specific period
Return on Assets(ROA)
Measures how profitably a company uses its assets. Net income/average total assets