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6.01 Key Terms

TermDefinition
Accounting The process of keeping and interpreting financial records.
Accounting system The methods and procedures used in consistently handling the business's financial information.
Accrual accounting method A method of accounting that records transactions at the time they occur even if no money changes hands at the time.
Cash accounting method An accounting method in which income and expenditures are recorded at the time the money changes hands.
Cost accounting Used to reduce and eliminate costs in a business. Cost accounting is used to determine a price for a product or service that will allow earnings of a reasonable profit.
Managerial accounting A type of accounting that involves preparing and reporting financial data to internal users, usually managers, who need financial information to control day-to-day operations and to make financial decisions and plans affecting the business.
Created by: drakon0130
 

 



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