Chapter 15 Flashcards
Data presented in a from
That is useful for a specific purpose
Information
A single collection of data and information stored in one place that can be used by people throughout an organization to make decisions
Database
A firms procedures for generating, using and sharing the data and information
Knowledge management (KM)
A system that provides managers and employees with the information they need to preform their jobs as effectively as possible
Management information system(MIS)
The transformation of data into a form that is useful for a specific purpose
Data processing
A measure that summarizes a particular characteristic of an entire group of numbers
Statistic
A type of software program that provides relevant data and information to help a firms employees make decisions
Decisions-support system (DSS)
A computer based system that facilitates and supports the decision making needs of top managers and señor executives by providing easy access to both internal and external information
Executive information system (EIS)
A type of computer program that uses artificial intelligence to imitate a humans ability to think
Expert system
The process of collecting analyzing and reporting financial information
Accounting
An examination of a companies financial statements and the accounting practices that produce them
Audit
An accepted set of guidelines and practices for U.S. companies reporting financial information and for the accounting profession
Generally accepted accounting principles (GAAPs)
Provides managers and employees with the information needed to make decisions about a firms financing, investing marketing and operating activities
Managerial accounting
Generates financial statements and reports for interested people outside an organization
Financial accounting
The resources that a business owns
Assets
A firms debts and obligations
Liabilities
The difference between a firms assets and liabilities
Owners equity
The basis for the accounting process
Assets=liabilities + owners equity
Accounting equation
A system in which each financial transaction is recorded as two seperate accounting entries to maintain the balance shown in the accounting equation
Double entry bookkeeping system
A report distributed to stockholders and other interested parties that describes the firms operating activities and financial condition
Annual report
A summary of the dollar amount of a firms assets liabilities and owners equity accounts at the end of a specific accounting period
Balance sheet ( or statement of financial position)
Numerical or verbal description that usually result from some sort of measurement
Data
assets that can be converted quickly into cash or that will be used in one year or less
Current assets
Assets that will be held or used for a period longer than one year
Fixed assets
The process of apportioning the cost of a fixed asset over the period during which it will be used
Depreciation
Assets that do not exist physically but that have a value based on the rights or privileges they confer on a firm
Intangible assets
Debts that will be repaid in one year or less
Current liabilities
Debts that will not be repaid for at least one year
Long-term liabilities
The per portion of a firms profits not distributed to stockholders
Retained earnings
A summary of a firms revenues and expenses during a specified accounting period
Income statement
The dollar amounts earned by a firm from selling goods, providing services or performing business activities
Revenues
The total dollar amount of all goods and services sold during the accounting period
Gross sales
The actual dollar amount received by a firm for the goods and services it has sold after adjustment for returns allowances and discounts
Net sales
The dollar amount equal to beginning inventory plus net purchases less ending inventory
Cost of goods sold
A firms net sales less the cost of goods sold
Gross profit
All business costs other than the cost of goods sold
Operating expenses
Occurs when revenues exceed expenses
Net income
Occurs when expenses exceed revenues
Net loss
A statement that illustrates how the companies operating investing and financing activities affect cash during an accounting period
Statement of cash flow
A number that shows the relationship between two elements of a firms financial statements
Financial ratio
A financial ratio calculated by dividing net income after taxes by net sales
Return on sales ( profit margin)
A financial ratio computed by dividing current assets by current liabilities
Current ratio
A financial rati calculated by dividing the cost of goods sold in one year by the average value of the inventory
Inventory turnover
The ease with which an asset can be converted into cash
Liquidity
An individual who has met state requirements for accounting education and experience and has passed a rigorous accounting examination
Certified public accountant
