Chapter 1 Flashcards
An information and measurement system that identifies, records, and communicates information about an organizations business activities.
Accounting
Assets = Liabilities + Equity
Accounting Equation
Resources a company owns or controls that are expected to yield current and future benefits.
Assets
A financial statement that lists types and dollar amounts of assets, liabilities, and equity at a specific date.
Balance Sheet
Principle that requires a business to be accounted for separately from it’s owner(s) and from any other entity.
Business Entity Principle
Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions.
Cost Principle
Codes of conduct by which actions are judged as right or wrong, fair or unfair, honest or dishonest.
Ethics
Exchanges of economic value between one entity and another entity.
External transactions
Principle that prescribes financial statements to reflect the assumption that the business will continue operating.
Going-concern assumption
Activities within an organization that can affect the accounting equation.
Internal transactions
Principle that assumes transactions and events can be expressed in money units.
Monetary unit assumption
Principle that assumes that information is supported by independent, unbiased evidence; it is more than an opinion.
Objectivity Principle
Part of accounting that involves recording transactions and events, either manually or electronically; also called bookkeeping.
Recordkeeping
Gross increase in equity from a company’s business activities that earn income; also called sales.
Revenues
The principle prescribing that revenue is recognized when goods or services are delivered to customers.
Revenue recognition principle
