Language of Business

Question 1

Sarbanes-Oxley

Answer 1

Passed in 2002, known as SOX Act…requires that the CEO and CFO certify the firm’s Financial Statements

Question 2

Financial Accounting Standards Board (FASB)

Answer 2

Located in Norwalk, CT and under the jurisdiction of the SEC…responsible to write the accounting rules that publicly traded companies must use

Question 3

GAAP

Answer 3

Generally Accepted Accounting Principles…the rules FASB writes…Financial Statements must follow GAAP rules

Question 4

International Accounting Standards Board (IASB)

Answer 4

The single, global accounting language

Question 5

Fundamental Accounting Equation

Answer 5

Assets = Liabilities + Owners’ Equity

Question 6

Double Entry Method

Answer 6

Recording both sides of a transaction…think of “what is the offset” to make the equation come back to parity. What must be added/subtracted as an “offset” to make the equation balance