SSCT Finance Accounting
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| Accounting | the information system that identifies, records, and communicates the economic events of an organization to interested users.
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| Assets | Resources a business owns
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| Balance Sheet | A financial statement that reports the assets, liabilities, and owner's equity at a specific date.
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| Basic accounting equation | Assets = liabilities + stockholder's equity
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| Bookkeeping | A part of accounting that involves only the recording of economic events
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| Corporation | A business organized as a separate legal entity under state corporation law, having ownership divided into transferable shares of stock.
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| Cost Principle | An accounting principle that states that companies should record assets at their cost.
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| Dividend | A distribution by a corporation to its stockholders on a pro rata (equal) basis.
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| Economic entity assumption | An assumption that requires that the activities of the entity be kep separate and distinct from the activities of its owner and all other economic entities.
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| Ethics | The standards of conduct by which one's actions are judged as right or wrong, honest or dishonest, fair or not fair.
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| Expenses | The cost of assets consumed or services used in the process of earning revenue.
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| Financial Accounting | The field of accounting that provides economic and financial information for investors, creditors and other external users.
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| Financial Accounting Standards Board (FASB) | A private organization that establishes generally accepted accounting principles.
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| FASB | Financial Accounting Standards Board
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| Generally accepted accounting principles (GAAP) | Common standards that indicate how to report economic events.
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| GAAP | generally accepted accounting principles
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| Income Statement | A financial statement that presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time.
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| International Accounting Standards Board (IASB) | An accounting standard-setting body that issues standards adopted by many countries outside of the United States.
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| IASB | International Accounting Standards Board
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| Liabilities | Creditor claims on total assets
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| Managerial Accounting | The field of accounting that provides internal reports to helop users make decisions about their companies.
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| Monetary unit assumption | An assumption stating that companies include in the accounting records only transaction data that can be expressed in terms of money.
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| Net income | The amount by which revenues exceed expenses
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| Net loss | The amount by which expenses exceed revenues.
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| Partnership | A Business owned by two or more persons associated as partners.
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| Proprietorship | A business owned by one person.
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| Retained earnings statement | A financial statement that summarizes the changes in retained earnings for a specific period of time.
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| Revenues | The gross increase in owner's equity resulting from business activities entered into for the purpose of earning income.
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| Sarbanes-Oxley Act of 2002 (SOX) | Law passed by Congress in 2002 intended to reduce unethical corporate behavior.
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| Securities and Exchange Commission (SEC) | A government agency that requires companies to file financial reports in accordance with generally accepted accounting principles.
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| Statement of cash flows | A financial statement that summarizes information about the cash inflows (receipts) and cash outflows (payments) for a specific period of time.
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| Stockholder's equity | The ownership claim on a corporation's total assets.
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| Transactions | The economic events of a business that are recorded by accountants.
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| Account | A record of increases and decreases in specific asset, liability, or stockholders' equity items.
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| Chart of Accounts | A list of accounts and the account numbers that identify their location in the ledger.
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| Common stock | Issued in exhange for the owners investment paid in to the corporation.
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| Compound entry | A journal entry that involves three or more accounts.
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| Credit | The right side of an account.
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| Debit | The left side of an account.
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| Dividend | A distribution by a corporation to its stockholders on a pro rata (equal) basis.
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| Double-entry system | A system that records in appropriate accounts the dual effect of each transaction.
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| General journal | The most basic form of journal
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| General Ledger | A ledger that contains all asset, liability, and stockholders' equity accounts.
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| Journal | An accounting record in which transactions are initially recorded in chronological order.
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| Journalizing | The entering of transaction data in the journal.
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| Ledger | The entire group of accounts maintained by a company.
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| Normal Balance | An account balance on the side where an increase in the account is recorded
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| Posting | The transfer of journal entries to the ledge accounts.
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| Retained earnings | Net income that is kep (retained) in the business.
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| Simple Entry | A journal entry that involves only two accounts.
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| T account | The basic form of an account.
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| Three-column form of account | A form with columns for debit, credit, and balance amounts in an account.
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| Trial balance | A list of accounts and their balances at a given time.
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| Accrual-basis accounting | Acounting basis in which companies record transactions that change a company's financial statements in the periods in which the events occur.
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| Accruals | Adjusting entries for either accrued revenues or accrued expenses.
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| Accrued expense | Expenses incurred but not yet paid in cash or recorded.
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| Accrued revenues | Revenues earned but not yet received in cash or recorded.
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| Adjusted trial balance | A list of accounts and their balances after the company has made all adjustments.
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| Adjusting entries | Entries made at the end of an accounting period to ensure that companies follow the revenue recognition and matching principles.
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| Book value | The difference between the cost of a depreciable asset and its related accumulated depreciation.
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| Calendar year | An accounting period that extends from January 1 to December 31.
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| Cash-basis accounting | Accounting basis in which companies record revenue when they receive cash and an expense when they pay cash.
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| Contra asset account | An account offset against an asset account on the balance sheet.
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| Deferrals | Adjusting entries for either prepaid expenses or unearned revenues.
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| Depreciation | The allocations of the cost of an asset to expense over its useful life in a rationa and systematic manner.
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| Fiscal year | An accounting period that is one year in length.
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| Interim periods | Monthly or quarterly accounting time periods.
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| Matching principle | The principle that companies match efforts (expenses) with accomplishments (revenues)
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| Prepaid expenses | Expenses paid in cash that benefit more than one accounting period and that are recorded as assets.
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| Revenue recognition principle | The principle that companies recognize revenue in the accounting period in which it is earned.
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| Time period assumption | An assumption that accountatns can divide the economic life of a business into artificial time periods.
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| Unearned revenues | Cash received and recorded as liabilities before revenue is earned.
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| Useful life | The length of service of a productive facility.
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| Classified balance sheet | A balance sheet that contains a number of standard classifications or sections.
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| Closing entries | Entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent stockholders equity account, Retained earnings
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| Correcting entries | Entries to correct errors made in recording transactions
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| Current Assets | Assets that a company expects to convert to cash or use up within one year.
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| Current Liabilities | obligations that a company expects to pay from existing current assets within the coming year.
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| Income Summary | A temporary account used in closing revenue and expense accounts.
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| Intangible assets | Noncurrent assets that do not have physical substance.
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| Liquidity | The ability of a company to pay obligations expected to be due within the next year.
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| Long-term investments | Generally, investments in stocks and bonds of ther companies that companies normally hold for many years. Also includes long-term assets, such as land and buildings, not currently being used in operations.
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| Long-term liabilites | Obligations that a company expects to pay after one year.
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| Operating cycle | The average time that it takes to go from cash to cash in producing revenues
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| Permanent (real) accounts | Accounts that relate to one or more accounting periods. Consist of all balance sheet accounts. Balances are carried forward to next accounting period.
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| Post-closing trial balance | A list of permanent accounts and their balances after a company has journalized and posted closing entries.
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| Property, plant, and equipment | Assets with relatively long useful lives, currently being used in operations.
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| Reversing entry | An entry, made at the beginning of the next accounting period that is the exact opposite of the adjusting entry made in the previous period.
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| Stockholders' Equity | The ownership claim of shareholders on total assets. It is to a coporation what owner's equity is to a proprietorship.
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| Temporary (nominal) accounts | Accounts that relate only to a given accounting period. Consist of all income statement accounts and the Dividends account. All temporary accounts are closed at end of accounting period.
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| Worksheet | A multiple-column form that may be used in making adjusting entries and in preparing financial statements.
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