Chapter 1 Flashcards
accounting
is a system that collects and processes(analyzes,measures,and records) financial information about an organization and reports the information to decision makers
Annual Report
a report prepared by corporate management that presents financial information including financial statements, a management discussion and analysis section, notes , and an independent auditor’s report
Assets
resources owned by a business
Auditor’s Report
a report by an independent outside auditor stating the auditor’s opinion as to the fairness of the presentation of the financial position and results of operations and their conformance with generally accepted principles
Balance Sheet
a financial statement that reports the assets and claims to those assets at a specific point in time
Asset=?
Liabilities + Stockholders’ Equity
Certified Public Accountant(CPA)
an individual who has met certain criteria and is thus allowed to perform audits of corporations
Common Stock
is the investment of cash and other assets in the business directly by the owners . The owners will receive a certificate as evidence of their ownership interest on the assets.
Corporation
a business organized as a separate legal entity owned by stockholders
Dividends
payments of cash from a corporation to its stockholders
Expenses
The costs of assets consumed or services used in the process of generating revenue
Income Statement
a financial statement that reports a company’s revenues and expenses and resulting net income or net loss for a specific period of time
Liabilities
Amounts owed to creditors in the form of debts and and other obligations
Net Income
The amount by which revenues exceed expenses
Net Loss
the amount by which expenses exceed revenues