Chapter 1

Card Set Information

Chapter 1
2012-01-23 17:06:37
Financial Accounting

Introducing Accounting in Business
Show Answers:

  1. an information and measurment system that identifies, records and communicates relevant, reliable and comparable information about an organization's business activites
  2. the recording of transactions and events, either manually or electronically
    record keeping/book keeping
  3. not directly involved in running the organization, have limited access to an organization's information
    external users
  4. area of accounting aimed at serving external users by providing them with general-purpose financial statements
    financial accounting
  5. those directly involved in managing and operating organizations, use info to help improve the efficiency and effectivness of an organization
    internal users
  6. the area of accounting that serves the decision-making needs of internal users
    managerial accounting
  7. procedures set up to protect company property and equipment, ensure reliable accounting reports, promote efficency, and encourage adherence to company policies
    internal controls
  8. 4 broad areas of accounting
    financial, managerial, taxation, and accounting-related
  9. CPA
    certified public accountant
  10. CMA
    certificate in managment accounting
  11. CIA
    certified internal auditor
  12. CB
    certified book keeper
  13. CPP
    certified payroll professional
  14. PFS
    personal finance specialist
  15. CFE
    certified fraud examiner
  16. CrFA
    certified forensic accountant
  17. beliefs that distinguish right and wrong; the accepted standards of good and bad behavior
  18. refers to a concern for the impact of actions on society, can include donations and programs
    social responsibility
  19. rules that specify acceptable accounting practices, aims to make information in financial statements releveant, reliable and comparable
    generally accepted accounting principles (GAPP)
  20. government agency that has the legal authority to set GAPP, oversees proper use of GAPP by companies that raise money from the public through issuances of their stock and debt
    securities and exchange commision (SEC)
  21. independent group (consisting of 16 individuals from many countries) that identifies preferred accounting practices and encourages global acceptance: issues International Financial Reporting Standards (IFRS)
    International Accounting Standard Board
  22. standards set by IASB, headquartered in London; refers broadly to all pronouncements of the IASB
    International Financial Reporting Standards
  23. system of interrelated objectives and fundamentals, disseminated by accounting regulators such as the FASB or IASB; intended to guide consistent standard setting and did accounting practitioners
    Conceptual Framework
  24. basic assumptions, concepts and guidelines for preparing financial statements
    general principles
  25. detailed rules used in reporting business transactions and events
    specific principles
  26. means that accounting information is based on actual cost
    measurment or cost principle
  27. provides guidance on when a company must recoginze revenue (record revenue)
    revenue recognition principle
  28. perscribes that a company must record its expenses incurred to generate the revenue
    expense recognition or matching principle
  29. requires a company to report the details behind financial statements that would impact users decisions
    full disclosure principle
  30. means that accounting information reflects a preassumption the business will continue operating
    going-concern assumption
  31. means we can express transactions in money
    monetary unit assumption
  32. presumes that the life of a company can be dvided into time periods, such as months and years
    time-period assumption
  33. means that a business is accounted for seperately from it's owners or other business entities
    business entity assumption
  34. business owned by 1 person; no legal requirements to start; seperate entity for accounting purposes, but it isn't a seperate legal entity from it's owner
  35. business owned by 2 or more people; no legal requirements to start; not legally seperate legal entity from it's owner
  36. LP
    limited partnership
  37. LLP
    limited liability partnership
  38. LLC
    limited liability company
  39. business legally seperate from it's owners
  40. perscribes that only information that would infuence the decisions of a reasonable person need be disclosed
    materiality constraint
  41. perscribes that only information with benifits of disclosure greater than the cost of providing it need be disclosed
    cost-benefit constraint