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4.01 A Key Terms
Business Activities
Term | Definition |
---|---|
Accountant | An individual who has had specialized training in accounting procedures |
Accounting | The process of keeping financial records |
Accounting cycle | A process of series of steps that business complete to maintain their financial records effectively |
Accounting standards | Rules that accountants must follow when preparing financial statements |
Acquisition of funds | Finance activity involving making decisions about financing |
Administration of assets | Finance activity involving making decisions about a firm's investments |
Assets | Anything of value that a business owns |
Balance sheet | A financial statement that captures the financial condition of the business at that particular moment |
Capital investment decisions | Decisions that determine which projects a business will invest in, how the investment(s) will be financed, and whether to pay dividends toshareholders |
Cash flow statement | A financial summary with estimates as to when, where, and how much money will flow into and out of a business |
Dividends | A sum of money paid to an investors or stockholder as earnings on an investment |
Expenses | The monies that a business spends; also called expenditures |
Finance | in business , the function that involves all money and money management matters |
Financial statement | A summary of accounting information |
Income | Money received by a business or an individual from outside sources |
Income statement | A financial summary that shows how much money the business had made or lost; also called the profit-and-loss statement |
Liabilities | Debts that the business owes |
Net worth | The total value of the business owes |
Owners equity | The amount an owner has invested in the business plus or minus profits or loss |