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Financial Accounting ACG 2021 Chapter 1-3 Vocabulary > ACG 2021 1-3 > Flashcards

ACG 2021 1-3 Flashcards

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Vocab Builder flashcards
1
Q

Accounting

A

A system of maintaining records of a company’s operations and communicating that information to decision makers

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2
Q

Financial Accounting

A

Measurement of business activities of a company and communication of those measurements to external parties for decision-making purposes

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3
Q

Corporation

A

An entity that is legally separate from its owners

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4
Q

Partnership

A

A business owned by two or more persons

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5
Q

Sole proprietorship

A

A business owned by one person

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6
Q

Assets

A

Resources of a company

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7
Q

Liabilities

A

Amounts owed to creditors

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8
Q

Stockholders’ equity, Stockholders’, or owners’

A

claims to resources, which equal the difference between total assets and total liabilities

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9
Q

Accounting Equation

A

The equation that shows a company’s resources (assets) equal creditors’ and owners’ claims to those resources (liabilities and stockholders’

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10
Q

Expenses

A

Costs of providing products and services

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11
Q

Revenues

A

Amounts recorded when the company sells products or services to customers

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12
Q

Net Income

A

Difference between revenues and expenses

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13
Q

Dividends

A

Distributions by a corporation to its stockholders

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14
Q

Financial Statements

A

Periodic reports published by the company for the purpose of providing information to external users

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15
Q

Income Statement

A

A financial statement that reports the company’s revenues and expenses over an interval of time

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16
Q

Statement of stockholders’ equity

A

A financial statement that summarizes the changes in stockholders’ equity over an interval of time

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17
Q

Balance sheet

A

A financial statement that presents the financial position of the company on a particular date

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18
Q

Statement of cash flows

A

A financial statement that measures activities involving cash receipts and cash payments over a period of time

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19
Q

Generally accepted accounting principles (GAAP)

A

The rules of financial accounting

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20
Q

Financial Accounting Standards Board (FASB)

A

AN independent, private body that has primary responsibility for the establishment of GAAP in the United States

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21
Q

International Accounting Standards Board (IASB)

A

The body primarily responsible for creating a single set of global accounting standards

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22
Q

International Financial Reporting Standards (IFRS)

A

The accounting rules set by the International Accounting Standards Committee (IASC) and currently set by the International Accounting Standards Board (IASB)

23
Q

Auditors

A

Trained individuals hired by a company as an independent party to express a professional opinion of the conformity of that company’s financial statements with GAAP

24
Q

Sarbanes-Oxley Act

A

Known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly referred to as SOX; the act established a variety of guidelines related to auditor-client relations and internal control procedures

25
Q

Accounting Cycle

A

Full set of procedures used to accomplish the measurement/communication process of financial accounting.

26
Q

External Transactions

A

Transactions the firm conducts with a separate economic entity

27
Q

Internal Transactions

A

Events that affect the financial position of the company but do not include an exchange with a separate economic entity.

28
Q

Account

A

A summary of the effects of all transactions related to a particular item over a period of time

29
Q

Chart of accounts

A

A list of all account names used to record transactions of a company

30
Q

Revenue Recognition Principle

A

Record revenue in the period in which we provide goods and services to customers

31
Q

Debit

A

The LEft side of an account. Indicates an increase in asset, expense, or dividend accounts, and a decrease to liability, stockholders’ equity, or revenue accounts.

32
Q

Credit

A

The right side of an account. Indicates a decrease to an asset, expense, or dividend accounts, and an increase to liability, stockholders’ equity, or revenue accounts

33
Q

Journal

A

A chronological record of all transactions affecting a firm

34
Q

Journal Entry

A

The format used for recording business transactions

35
Q

Posting

A

The process of transferring the debt and credit information from the journal to individual accounts in the general ledger

36
Q

General Ledger

A

A single location that provides a list of transactions affecting each account and the account’s balance

37
Q

T - Account

A

A simplified form of a general ledger account with space at the top for the account title, one side for recording debits, and one side for recording credits

38
Q

Trial balance

A

A list of all accounts and their balances at a particular date, showing that total debits equal total credits

39
Q

Accrual-Basis Accounting

A

Record revenues when goods and services are provided to customers, and record expenses with related revenues

40
Q

Matching Principle

A

Recognize expenses in the same period as the revenues they help to generate

41
Q

Cash-basis Accounting

A

record revenues at the time cash are received and an expense at the time cash is paid

42
Q

Adjusting Entries

A

Entries used to record events that occur during the period but that have not yet been recorded by the end of the period

43
Q

Prepaid Expenses

A

The costs of assets acquired in one period that will be expensed in a future period

44
Q

Depreciation

A

The process of allocating the cost of a long-term asset to expense over its useful life

45
Q

Contra Account

A

An account with a balance that is opposite, or “contra,” to that of its related accounts

46
Q

Deferred Revenues

A

When a company receives cash in advance from a customer for products or services to be provided in the future.

47
Q

Accrued Expense

A

When a company has incurred an expense but hasn’t yet paid cash or recorded an obligation to pay

48
Q

Adjusted Trial Balance

A

A list of all accounts and their balances after we have updated account balances for adjusting entries.

49
Q

Classified Balance sheet

A

A balance sheet that groups a company’s assets into current assets and long-term assets and that separates liabilities into current liabilities and long-term liabilities.

50
Q

Temporary Accounts

A

All revenue, expense, and dividend accounts; account balances are maintained for a single period and then closed (or zeroed out) and transferred to the balance of the retained earnings account at the end of the period

51
Q

Permanent Accounts

A

All accounts that appear in the balance sheet; account balances are carried forward from period to period

52
Q

Closing Entries

A

Entries that transfer the balances of all temporary accounts (revenues, expenses, and dividends) to the balance of the Retained Earnings account

53
Q

Post-closing trial balance

A

A list of all accounts and their balances at a particular date after we have updated account balances for closing entries.

Financial Accounting ACG 2021 Chapter 1-3 Vocabulary (2 decks)

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