Chapter 1 Flashcards
The form of balance sheet that resembles the basic format of the accounting equation, with Assets on the left side and Liabilities and Owner’s Equity sections on the right side.
Account Form
The liability created by a purchase on account.
Account Payable
A claim against the customer created by selling merchadise or services on credit.
Account Receivable
An information system that provides reports to stakeholders about the economic activities and condition of a business.
Accounting
Assets = Liabilities + Owner’s Equity
Accounting Equation
The resources owned by a business.
Assets
A list of the assets, liabilities, and owner’s equity as of a specific date, usually at the close of the last day of a month or a year.
Balance Sheet
An organization in which basic resources (inputs), such as material and labor, are assembled and processed to provide goods or services (outputs) to customers.
Business
A concept of accounting that limits the economic data in the accounting system to data related directly to the activities of the business.
Business Entitiy Concept
An economic event or condition that directly changes an entitiy’s financial condition or directly affects its results of operations.
Busniess Transaction
Public accountants who have met a state’s education, experience, and examination requirements.
Certified Public Accountant (CPA)
A business organized under state or federal statutes as a separate legal entity.
Corporation
A concept of accounting that determines the amount initially entered into the accounting records for purchases.
Cost Concept
Used to describe when revenues exceed expenses. (Also see net income and net profits.)
Earnings
Moral principles that guide the conduct of individuals.
Ethics
Assets used up or services consumed in the process of generating revenues.
Expenses
Revenue from providing services.
Fees earned
The branch of accounting that is concerned with recording transactions using generally accepted accounting principles (GAAP) for a business or other economic unit and with a periodic preparation of various statements from such records.
Financial Accounting
The authoritative body that has the primary responsibility for developing accounting principles.
Financial Accounting Standards Board (FASB)
Financial reports that summarize the effects of events on a business.
Financial Statements
A type of financial accounting report that is distributed to external users. The term “general purpose” refers to the wide range of decision-making needs that the reports are designed to serve.
General-purpose Financial Statements
Generally accepted guidelines for the preparation of financial statements.
Generally Accepted Accounting Principles (GAAP)
A summary of the revenue and expenses for a specific period of time, such as a month or a year.
Income Statement
Money received for interest.
Interest Revenue
An organization that issues International Financial Reporting Standards for many countries outside the United States.
International Accounting Standards Board (IASB)
The rights of creditors that represent debts of the business.
Liabilities
A business form consisting of one or more persons or entities filing an operating agreement with a state to conduct business with limited liability to the owners, yet treated as a partnership for tax purposes.
Limited Liability Company (LLC)
The branch of accounting that uses both historical and estimated date in proving information that management uses in conducting daily operations, in planning future operations, and in developing overall business strategies.
Management (or managerial) Accounting
A type of business that changes basic inputs into products that are sold to individual customers.
Manufacturing Business
A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses.
Matching Concept (or Matching Principle)
A type of business that purchases products from other businesses and sells them to customers.
Merchandising Business
The amount by which revenues exceed expenses.
Net income or Net Profit
The amount by which expenses exceed revenues.
Net Loss
A concept of accounting that requires accounting records and the data reported in financial statements to be based on objective evidence.
Objectivity Concept
The owner’s right to the assets of the business.
Owner’s Equity
The unicorporated business form consisting of two or more persons conducting business as co-owners for profit.
Partnership
Items such as supplies that will be used in the business in the future.
Prepaid Expenses
The field of accounting whereby accountants are employed by a business firm or not-for-profit organization.
Private Accounting
The difference between the amounts received from customers for goods or services provided and the amounts paid for the inputs used to provide goods or services.
Profit
A business owned by one individual.
Proprietorship
The field of accounting where accountants and their staff provide services on a fee basis.
Public Accounting
Money received for rent
Rent Revenue
Increases in owner’s equity as a result of selling services or products to customers.
Revenues
The total amount charged customers for merchandise sold, including cash sales and sales on account.
Sales
An _agency of the U.S. Governmen_t that has authority over the accounting and financial disclosure for companies whose shares of ownership (stock) are traded and sold to the public.
Securities and Exchange Commision (SEC)
A business providing services rather than products to customers.
Service Business
A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.
Statement of Cash Flows
A summary of the changes in owner’s equity that have occured during a specific period of time, such as a month or a year.
Statement of Owner’s Equity
A concept of accounting requiring that economic data be recorded in dollars.
Unit of measure concept
