Introduction Flashcards
Financial Accounting
The field of accounting that focuses on the measurement and communication of the economic events and status of an entire organization.
Another name for financial accounting
the language of business
What are the five components of a financial statement?
balance sheet
income statement
statement of changes in equity
statement of cash flows
notes
Annual Report
A report issued by an organization to its stakeholders that contains descriptive information and financial statements for the prior year
What are the five types of accounts that are summarized in financial statements?
assets
liabilities
equity
revenues
expenses
Assets
The resources, or things of value, that are owned or controlled by the business.
liabilities
The fixed financial obligations of the organization. Liabilities represent claims on the assets of the organization by creditors
Equity
Assets minus liabilities; in other words, the “book value” of the ownership position of a business.
Revenues
Inflows of assets resulting from the exchange of goods or services with customers
Expenses
The cost of doing business; the dollar value of resources used to provide goods or services
balance sheet
a financial statement that reports a company’s assets, liabilities, and equity
income statement
a financial statement that lays out a company’s revenue and expenses.
statement of changes in equity
a financial statement that summarizes how a businesses equity has changed over a set period of time
statement of cash flows
a financial statement that shows how changes in a balance sheet and income affect cash, and analyze operation, investing, and financial activities
notes
provides additional information about a company’s financial statements.
