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4.01 nature of accou
objective 4.01 part 2
| Term | Definition |
|---|---|
| accountant | an individual who has had specialized training in accounting procedures |
| accounting | the process of keeping financial records |
| accounting cycle | a process or series of steps that businesses complete to maintain thier financial records effectively |
| accounting standards | rules that accountants must follow when preparing financial statements |
| accounting system | the methods and procedures used in consistently handling the business financial information |
| acquisition of funds | finance activity involving making decisions about financing |
| administration of assets | finance activity involving making decisions about a firm's investment |
| accrual accounting method | a method of accounting that records transactions at the time they occur evn if no money changes hands at the time |
| assets | anything value that a business owns |
| balance sheet | a financial statement that captures the finacial condition of the business at that particular moment |
| bookkeeping | the steps of the accounting cycle that invole recording each business transaction; the process of analyzing financial tranactions, journalizing transactions, posting to ledgers, and balancing the books |
| cash | currency and coins |
| cash accounting method | an accounting method in wi=hich income and expenditures are recorded at the time the money changes hands |
| cash flow statement | a financial summary with estimates as to when, where, and how, much money will flow into and out of a business |
| capital investment decisions | decisions that determine which projects a business will invest in, how the investments will be financed, weather to pay dividends to shareholders |
| credit | the arrangement by which business or individuals can purchased now and pay later |
| expenditure | the monies that a business spends; also called expenses |
| expenses | the monies that a business spends; also called expenditures |
| finance | in business, the function that invloves all money and money management matters |
| financial accuonting | a type of accounting that involes preparing and reporting financial data to external users who are not directly involed in bussiness operations |
| 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 show how much money the business has made or has lost; also called the profit-and-loss statement |
| investors | those who invest their funds in a business; may be owners or stockholders |
| journal | a special book or computerprogram in which a business's transaction are recorded in the order in which they occur |
| ledger | the accounting record for a specific department or area of the business |
| liabilities | debts that the business owes |
| managerial accounting | a branch of accounting concerned with the identification, measurement, analysis, and interpretation of accounting information. |
| net woth | the difference between your assets and your liabilities. |
| owner's equity | the portion of a company's assets that an owner can claim |
| transaction | an instance of buying or selling something; a business deal. |
| trial balance | a report that lists the balances of all general ledger accounts of a company at a certain point in time. |
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