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Chap 1 pg 31 terms
Intro to Accounting
| Question | Answer |
|---|---|
| Accounting | The process of identifying, measuring and communicating economic information to various users. |
| Management accounting | The branch of accounting concerned with providing management with information to facilitate the planning and control functions. |
| Financial accounting | The branch of accounting concerned with communication with outsiders through financial statements. |
| Owners'equity | The owners' claims to the assets of an entity. |
| Stockholders' equity | The owners' equity of a corporation. |
| Retained earnings | The part of owners' equity that represents the income earned less dividends paid over the life of an entity. |
| Balance sheet | The financial statement that summarizes the assets, liabilities, and owners' equity at a specific point in time. |
| Income statement | A statement that summarizes revenues and expenses for a period of time. |
| Net income | The excess of revenues over expenses. |
| Dividends | A distribution of the net income of a business to its stockholders. |
| Statement of retained earnings | The statement that summarizes the income earned and dividends paid over the life of a business. |
| Statement of cash flow | The financial statement that summarizes a company's cash receipts and cash payments during the period from operating, investing, and financing activities. |
| Cost principle | Assets are recorded and reported at the cost paid to acquire them. |
| Going concern | The assumption that an entity is not in the process of liquidation and that it will continue indefinitely. |
| Monetary unit | The yardstick used to measure amounts in financial statements; the dollar in the United States. |
| Time period | A length of time on the calendar used as the basis for preparing financial statements. |
| Generally accepted accounting principles (GAAP) | The various methods, rules practices, and other procedures that have evolved over time in response to the need to regulate the preparation of financial statements. |
| Securities and Exchange Commission (SEC) | The federal agency with ultimate authority to determine the rules for preparing statements indefinitely. |
| Financial Accounting Standards Board (FASB) | The group in the private sector with authority to set accounting standards. |
| American Institute of Certified Public Accountants (AICPA) | The professional organization for certified public accountants. |
| Certified Public Accountant (CPA) | The designation for an individual who has passed a uniform exam administered by the AICPA and has met other requirements as determined by individual states. |
| Public Company Accounting Oversight Board (PCAOB) | A five-member body created by an act of Congress in 2002 to set auditing standards. |
| International Accounting Standards Board (IASB) | The organization formed to develop worldwide accounting standards. |
| Auditing | The process of examining the financial statements and the underlying records of company to render an opinion as to whether the statements are fairly presented. |
| Sarbanes-Oxley Act | The act of Congress in 2002 intended to bring reform to corporate accountability and stewardship in the wake of a number of major corporate scandals. |
Created by:
sam6204
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