Chapter 1- Accounting In Action Flashcards
An area of public accounting ranging from development of accounting and computer systems to support services for marketing project and merger and acquisition activities
Management consulting
The amount by which revenues exceed expenses
Net income
International accounting standards set by the International Accounting Standards Board (IASB)
International Financial Reporting Standards (IFRS)
The increases in assets or decreases in liabilities resulting from the sale of goods or the performance of services in the normal course of business
Revenues
A business owned by two or more persons associated as partners
Partnership
In accounting standard-setting body that issue standards adopted by many countries outside of the United States
International Accounting Standards Board (IASB)
Something of value owned by an entity; economic resources that are owned by the business and used in the business hopefully to produce a profit.
Assets
Law passed by Congress intended to reduce unethical corporate behavior
Sarbanes-Oxley Act (SOX)
The amount by which expenses exceed revenues
Net loss
An area of accounting in which the counter offers expert service to the general public
Public accounting
Assets = liabilities + common stock + revenues - expenses - dividends
Expanded accounting equation
An assumption that requires that the activities of the entity be kept separate and distinct from the activities of its owner and all other economic entities
Economic entity assumption
Financial information that is capable of making a difference in a decision
Relevance
The information system that identifies, records, and communicates the economic event of an organization to interested users
Accounting
A part of accounting that involves only the recording of economic events
Bookkeeping
The economic events have a business that are recorded by accountants
Transactions
In accounting principles that states that companies should record assets at their cost
Historical cost principle
The use of software and statistics to draw inferences from data
Data analytics
A financial statement that summarizes the changes in retained earnings for a specific period of time
Retained earnings statement
Common standards that indicate how to report economic events
Generally excepted accounting principles (GAAP)
An accounting principle stating that assets and liabilities should be reported at fair value (The price received to sell an asset or settle a liability)
Fair value principle
The ownership claim on the corporations total assets
Common stock and retained earnings
Stockholders equity
A business organized as a separate legal entity understate corporation law, having ownership divided into transferable shares of stock
Corporation
An area of accounting that uses accounting, auditing, and investigative skills to conduct investigations into theft and fraud
Forensic accounting
A business owned by one person
Proprietorship
An area of accounting within a company that involve such activities as cost accounting, budgeting, design and support of accounting information systems, and tax planning and preparation
Private (managerial) accounting
A financial statement that summarizes information about the cash inflows (receipts) and cash (outflow’s) payment for a specific period of time
Statement of cash flows
Examination of financial statement by certified public accountant in order to express an opinion as to how accurately the financial statements present the companies results and financial position
Auditing
The cost of assets consumed or services used in the process of generating revenue
Expenses
A financial statement that reports the assets, liabilities, and stockholders equity at a specific date. Proves the accounting equation is still in balance.
Balance sheet
The system of collecting in processing transaction data and communicating financial information to decision-makers
Accounting information system
Assets = liabilities + stockholders equity
Basic accounting equation
In the area of public accounting involving tax advice, tax planning, preparing tax returns, and representing client before governmental agencies
Taxation
A financial statement that Presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time.
Revenues-expenses= net income (net loss)
Income statement
An assumption stating that only transactionsthat can be expressed in terms of money are recorded.
Monetary unit assumption
Debts and obligations of the company. (What the company owes)
Liabilities
A private organization that establishes generally excepted accounting principles (GAAP) in the United States
Financial Accounting Standards Board (FASB)
The field of accounting that provides economic and financial information for investors, creditors, and other external users
Financial accounting
Numbers and descriptions match foot really existed or happened-they are factual
Faithful representation
The field of accounting that provides internal reports to help users make decisions about their companies
Managerial accounting
A governmental agency that overseas US financial markets and accounting standard-setting bodies
Securities and Exchange Commission (SEC)
All items (assets) should be recorded and reported at their cost. Assets are not adjusted to their market value in future years.
Cost principle
What is owned (assets) must equal what is owed to creditors (liabilities) and to owners (stockholders’ equity); applies to all economic entities.
Accounting concept
An accountants way of communicating the financial information of a company to the interested users.
Financial statements
Revenues-expenses=net income (net loss)
Income statement
Summarizes the changes in retained earnings over a specific period of time.
Beginning retained earnings + net income (or - net loss) - dividends = ending retained earnings
Retained earnings statement
Reports the assets, liabilities and stockholders equity of a company at a specific date. Proves that the accounting equation is still in balance.
Assets = liabilities-stockholders’ equity
Balance sheet
Standards of conduct by which ones actions are judged as right or wrong, fair or unfair, honest or dishonest.
Ethics
