An information and measurement system that identifies, records, and communicates an organization’s business activities” OR “the language of business”

people that have shares in the company but are not employed

identifying, recording, communicating

internal controls, auditors, GAAP, FASB

procedures to keep people honest

opportunity-commit fraud with a low risk of getting caught, pressure-incentive/reason to commit fraud, rationalization-attitude/justifying fraud or does not see its criminal nature

perform audit to verify internal controls and validate the accuracy of the general ledger using GAAP, or IFRS

generally accepted accounting prinicples for the USA

sets GAAP and is financial accounting standards board

Measurement principle

based on actual cost and recorded properly

revenue recognition principle

revenue/income should be recognized when goods or services are provided

expense recognition (matching) principle

should be recognized in the same period as the revenue recognized as a result of that expense. recognize when you recieve the benefit

add notes to numbers if they do not make sense without the note

monetary unit assumption

everything should be in numbers

something we own with value or something to bring future value

things we owe/future obligation to provide assets, products, or services to others. Unearned revenue, accounts payable, note payable, taxes payable

owners claim on assets is equal to assets minus liabilities. change when value of business changes

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Acctg 241

Question	Answer
Accounting	An information and measurement system that identifies, records, and communicates an organization’s business activities” OR “the language of business”
intern users	directly employed by user
external user	people that have shares in the company but are not employed
3 things	identifying, recording, communicating
fraud prevention	internal controls, auditors, GAAP, FASB
internal controls	procedures to keep people honest
fraud triangle	opportunity-commit fraud with a low risk of getting caught, pressure-incentive/reason to commit fraud, rationalization-attitude/justifying fraud or does not see its criminal nature
auditors	perform audit to verify internal controls and validate the accuracy of the general ledger using GAAP, or IFRS
GAAP	generally accepted accounting prinicples for the USA
FASB	sets GAAP and is financial accounting standards board
Measurement principle	based on actual cost and recorded properly
revenue recognition principle	revenue/income should be recognized when goods or services are provided
expense recognition (matching) principle	should be recognized in the same period as the revenue recognized as a result of that expense. recognize when you recieve the benefit
full disclosure	add notes to numbers if they do not make sense without the note
monetary unit assumption	everything should be in numbers
Number of owners
Owner liability
Asset	something we own with value or something to bring future value
liabilities	things we owe/future obligation to provide assets, products, or services to others. Unearned revenue, accounts payable, note payable, taxes payable
equity	owners claim on assets is equal to assets minus liabilities. change when value of business changes
assets= liabilities + equity	accounting equaiton

Created by: agk236

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