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4.01 Nature of Acc.
| Term | Definition |
|---|---|
| Accounting | The process of keeping and interpreting financial records. |
| Accounts Payable | All monies owed by the business to others. |
| Accounts Receivable | All monies owed to a firm by its customers. |
| Acquisition of Funds | Finance activity involving making decisions about financing. |
| Administration of Assets | Finance activity involving making decisions about a firm's investments. |
| Asset(s) | Anything of value that a business or individual owns. |
| Capital Budgeting | A process in which a firm's financial managers determine which projects it should invest in. |
| Capital Investments Decisions | Decisions that determine which projects a business will invest in , how the investment(s) will be financed, and whether to pay dividends to shareholders. |
| Capital Structure | A firm's mix of financing, usually some combination of debt and equity. |
| Cash Conversion Cycle | Ratio that refers to the number of days between a company paying for raw materials and receiving cash from selling the products made from those raw materials. |
| Debt Funding | Using Money that is lent by a bank or other institution to finance a project. |
| Dividend | A sum of money paid to an investor or stockholder as earnings o an investment. |
| Equity Funding | Using money from investors to finance a project in exchange for shares in the company. |
| Finance | In business, the function that involves all money and money management matters. |
| Financing | Funding a business activity or project through debt, equity, or venture capital. |
| Return on Capital | A measure of how well a business generates cash flow in relation to the capital it has already invested in itself. |
| Venture Capital | Invested money used for new business opportunities. |
| Working Capital Management | Management of a firm's current balance of assets and liabilities; involves accounts payable and receivable, inventory, and cash. |
| 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 compete to maintain their 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'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. |
| Assets | Anything of value that a business owns. |
| Balance Sheet | A financial statement that captures the financial condition of the business a the particular moment. |
| Bookkeeping | The steps of the accounting cycle that involve recording each business transaction; the process of analyzing financial transactions, journalizing transactions, posting to ledgers, and balancing the books. |
| Cash | Currency and coins. |
| Cash Accounting Method | An accounting method in which 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. |
| Credit | The arrangement by which businesses or individuals can purchase now and pay later. |
| Expenditures | The monies that a business spends; also called expenses. |
| Expenses | The monies that a business spends; also called expenditures. |
| Financial Accounting | A type of accounting that involves preparing and reporting financial data to external users who are not directly involved in business 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 shows 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 computer program in which a business's transactions 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 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. |
| Net Worth | The total value of the business. |
| Owner's Equity | The amount an owner has invested in the business plus or minus profits and losses. |
| Transaction | A business activity such as a sale, a purchase, or return. |
| Trial balance | The listing of a business's different accounts and their current balances; used to check the accuracy of journal and ledger entries. |
Created by:
brenda.m383
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