Card Set Information
Finacial Accounting 212
The four basic statements of financial accounting
1. Income Statement ( the statement of operations)
2. Statement of retained earnings
3. Balance sheet ( the statement of financial position)
4. Statement of cash flow
Financial Statements are:
The business documents that companies use to represent their finances to the public.
1. An information system. It measures business activities.
2. Processes data inot reports.
3. Communicates results to people.
Financial statements produces:
1.and reports information about a business entity.
2. It measures performance and tells where a business stands in financial terms.
What a the two types of accounting?
1. Financial Accounting
2. Management Accounting
Finacial Accouting generates:
1. information for people outside the firm ( investors, bankers, govenment agencies, and the public.)
2. The information must meet standards of relevance and reliablity.
Management Acoounting generates?
1. Inside information for the managers of the company.
2. Management information does not have to meet external standards of reliablity, only company employees use these data.
What are the ethics in accounting, standards of professional conduct?
1. Laws that requre companies to report relevant and reliable information to outsiders.
Able to affect a dexision based on informations.
What does reliable mean?
Information that is verifiable and free of error and bias.
Which institure sets the standard for criteria for ethical judgement in accounting?
The American Instiute of Certified Public Accountants ( AICPA).
What are at least 4 organization of a Business?
3. Limited-Liablity Company (LLC)
Which company form has a single owner?
Properitorships are legally responsible for ?
1. The business
2. The properitor is legally responsible for all business debts.
3. The propritorship is distinct from business records do not include the propritor's personal finances.
A partnership is made up of ?
1. Two or more persons.
2. each owner is a partner
3. Each partner is personally liable for all the partnership's debts.
a partnership that in which, a wayward partner cannot create a large liability for other partners. Each partner is liable for their own actions and those under their control.
A business that is liable for company's debts that excludes it owner's from liablity is called?
Limited-Liablity Company (LLC)
What are owners of a company called, that do not have personal liability for the business's debts.
LLC Limited-Liablity company taxes are paid through?
Members for which they pay personal income tax that are taxed at their individual rates. The company does not pay taxes.
Corporations are business that are owned by?
Is owned by stockholders or Shareholders.
Stockholder and Shareholder own?
Stock in the company which, represents shares of ownership in the corporation.
Control of a corporation is controlled by?
Stockholders for which, for each stock owned a shareholder recieves 1 vote.
The board of directors are elected by share holders to?
1. Set policy
2. Appoint officers
3. Elects a chairperson ( holding the most power)" Chief Operationg Officer
GAAP stands for?
Generally Accepted Accounting Principals
professional guidelines that accountants follow. Set by Financial Accounting Standards Board (FASB)
2. Designed to proviced primary objective of financial reporting of information that is useful form making investment and credit descision by.
The basic accounting concept that any organization that stands apart as a separate economic unit is an?
Another name for" Reliability Principle is?
1. Principals that ensure relevance and reliability in accounting records are based on the most objective data availiable.
The recording that assets and services should be recorded at their actual historical cost is?
It assumes that the entity will remain in operation long enough to use existing assets( land, building, supplies) for their intended purpose is?