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American Accounting Association
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audit
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Acconting Test
vocabulary
| Question | Answer |
|---|---|
| American Accounting Association | A professional accounting organization consisting primarily of accounting educators that is dedicated to improving accounting education, research, and practice. |
| audit | An investigation of financial statement designed to determine their fairness in relation to generally accepted accounting principles |
| balance sheet | A position statement that show where the company stands in financial terms at specific date. |
| certified public accountant | An accountant who is licensed by state after meeting rigorous education, experience and examination requirements |
| Financial Accounting Standards Boards | A private-sector organization that is responsible for determining generally accepted accounting principles in the United States |
| generally accepted accounting principles | Principles that provide the framework for determining what information is to be included in financial statement and how that information is to be presented. |
| income statement | An activity statements that shows details and results of the company's profit-related activities for a period of time. |
| Internal Revenue Service | A government organization that handles millions of income tax return filed by individuals and businesses and preforms audits functions to verify the data contained in those returns. |
| internal users | individuals who use accounting information from within an organization ( for example, board of director, chief financial officer, plant managers, store managers.) |
| International Accounting Standards Boards | The group responsible for creating and promoting International Financial Reporting Standards |
| management accounting | Providing information that is intended primarily for use by internal management in decision making required to run the business. |
| Securities and Exchange Commission | A governmental organization that has the legal power to establish accounting principles and financial reporting requirements for publicly held companies in the United States. |
| statement of cash flows | An activity statement that shows the details of the company's activities involving cash during a period of time. |
| balance sheet | summarizing its assets, liabilities, and owner's equity at a point in time |
| capital stock | Transferable units of owner in a corporation. |
| cost principle | The widely used principle of accounting for assets at their original cost to the current owner |
| creditor | A person or organization to whom debt is owed. |
| expenses | Past, present, or future reductions in cash required to generate revenues. |
| financial statement | A declaration of information believed to be true and communicated in monetary terms. |
| going concern assumption | An assumption by accountants that business will operate in the foreseeable future unless specific evidence suggests that this is not a reasonable assumption. |
| income statement | An activity statement that subtracts from the enterprise's revenue those expenses required to generate the revenues, resulting in a net income or net loss. |
| investing activities | A category in statement of cash flows that reflects the results of purchases and sales of assets such as land, buildings, and equipments. |
| liabilities | Debts or obligations of an entity that resulted from past transactions. |
| liquidity | Having the financial ability to pay debts as they become due. |
| operating activities | A category in the statement of cash flows that includes the cash effects of all revenues and expenses included in the income statement |
| owner's equity | The excess of assets over liabilities. The amount of the owners' investment in the business, plus profits from sucessful operations that have been retained in the business |
| retained earnings | The portions of stockholders' equity that has accumulated as a result of profitable operations. |
| revenues | Increases in the enterprise's assets as results of profit - oriented activies. |
| stockholders' equity | The owners' equity of an enterprise organized as a corporation. |
| account | A record used to summarize all increases and decreases in a particular asset, such as cash, or any other type of asset, liabilty, owners' equity, revenue, or expense |
| accounting cycle | THe sequence of accounting procedure used to record, classify and summarize accounting information. |
| accounting period | The span of time covered by income statement.One year is the accounting period for much financail reporting, but financial statements are also prepareed by companies for each quater of the year and for each month |
| accrual basis of accounting | Calls for recording revenue in the period in which it is earned and recording expenses in the period in which they are incurred. |
| covervatism | THe traditional accounting practice of resloving uncertainty by chossing the solution that leads to the lower amount of income being recognized in the current accounting period |
| credit | An amount entered on the right side |
| debit | An amount entered on the left side |
| dividends | A distribution of resources by a corpation to its stockholders. The resource most often distributed is cash |
| double entry accounting | A system of recording every business tranaction with equal dollar amounts of both debit and credit. |
| expenses | The cost of the good and services used up in the process of obtaining revenue. |
| fiscal year | A 12 month accounting period adopted by a business |
| general journal | The simplest type of journal, it has two money columns- one for credit and one for debits |
| journal | A chronological record of tranactions showing for each transaction the debits and credits to be entered in specific ledger accounts |
| ledger | An accounting system includes a separate record for each item that appears in the financial statements |
| matching principle | The generally accepted accounting prinple that determines when expenses should be recorded in the accounting record |
| net income | An increase in owners'equity resulting from profitaable operations |
| net loss | A decrease in owners' equity resulting from unprofitable operations |
| objectivty | Accounts preference for using dollar amounts that are relatively factual as opposed to merely matters of personal opinions |
| posting | The process of transferring information from the journal to indivdual accounts in the ledger |
| realization principle | The generally accepted accounting principle that determines when revenues should be recored in the accounting records |
| time period principle | To provide the user of financial statement with timely information, net income is measured for relativly short accounting periods of equal length. |
| trial balance | A two column schedule listing the names and the debit or credit balances of all accounts in the ledger |
| partnership | An unincorporated form of business organization in which two or more persons voluntarily associate for purposes of carrying out business activies |
| sole proprietorship | An unincorporated business owned by a single individual. |
| corporation | A business organized as a seperate legal entity and charted by a state, with ownership divided into transferable shares of capital stock |
Created by:
cristemelton