Topic 1: The Nature & Purpose of Financial Accounting Flashcards
A system of providing quantitative information, primarily financial information nature, about economic entities that is intended to be useful in making economic decisions
Accounting
The professional organization of CPAs in the United States.
American Institute of Certified Public Accountants (AICPA)
Document that reports assets, liabilities, & owners equity.
Balance sheet
How much money has been invested in the company.
Owners equity
Preservation of a systematic quantitative record of an activity.
Bookkeeping
Someone who has taken minimum number of college-level accounting classes, passed CPA exam, & met state requirements.
Certified Public Accountant (CPA)
Accounting information provided for and used by external users.
Financial accounting
The 3 primary financial information documents.
1. Balance sheet
2. Income statement
3. Statement of cash flows
Financial statements
Document that reports the amount of net income earned by a company during a period of time, with annual and quarterly income being the most common.
Income statement
Government agency responsible for tax collection and tax law enforcement.
Internal Revenue Service (IRS)
independent, international body formed to develop worldwide accounting standards.
International Accounting Standards Board (IASB)
Accounting standards produced by IASB.
International Financial Reporting Standards (IFRS)
Accounting systems designed for internal users.
Managerial Accounting
private, non-profit organization. Serves as an arm of the SEC in registering, inspecting, and disciplining auditors of all publicly traded companies.
Public Company Accounting Oversight Board (PCAOB)
Amount of cash collected and paid out by a company in the following three activities: operating, investing, and financing.
Statement of Cash Flows
