Accounting Vocabulary Chapter One

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Accounting Vocabulary Chapter One
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2010-10-18 20:57:15
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Accounting vocabulary
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accounting vocabulary
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  1. Account Payable
    A liability backed by the general reputation and credit standing of the debtor.
  2. Account Recivable
    A promise to recieve cash from customers to whom the business has sold goods or for whom the business has performed services.
  3. Accounting
    The information system that measures business activities, processes that information into reports, and communicates the results to decision makers.
  4. Accounting Equation
    The basic tool of accounting, measuring the recources of he business and the claims to those resources: Assets = Liabilities + Owner's Equity.
  5. Asset
    An economic resource that is expected to be of benefit in the future.
  6. Audit
    An examination of a company's financial situation.
  7. Balance Sheet
    An entity's assets, liabilities, and owner's equity as of a specific date. Also called the statement of financial position.
  8. Capital
    Representation of ownership investment by an owner of a proprietorship.
  9. Certified Management Accountant (CMA)
    A licensed accountant who works for a single company.
  10. Certified Public Accountants (CPAs)
    Licensed accountants who serve the general public rather than one particular company.
  11. Corporation
    A business owned by stockholders. A corporation begins when the state approves its articles of incorporation and the first share of stock is issued. It is a legal entity, an "artificial person," in the eyes of the law.
  12. Cost Principle
    A principle that states that acquired assets and sevices should be recorded at their actual cost.
  13. Creditor
    Someone to whom a business owes money
  14. Entity
    An organization or section of an organization that, for accounting purposes, stands apart from other organizations and individuals as separate economic unit.
  15. Equity
    The claim of a proprietorship's owner to the assets of the business. Also called owner's equity.
  16. Expenses
    Decrease in equity that occurs from using assets or increasing liabilities in the course of delivering goods or services to customers.
  17. Financial Accounting
    The branch of accounting hat focuses on information for peopleoutside the firm.
  18. Financial Accounting Standards Board (FASB)
    The private organization that determines how accounting is practiced in the United States.
  19. Financial Statements
    Documents that report on a business in monetary amounts, providing information to help people make informed business decisions.
  20. Generally Accepted Accounting Principles (GAAP)
    Accounting guidelines, formulated by the Financial Accounting Standards Board, that govern how accountants measure, process, and communicate financial information.
  21. Going-Concern Concept
    This concept assumes that the entity will remain in operation for the forseeable future.
  22. Income Statement
    Summary of an entity's revenues, expenses, and net income or net less for a specific period. Also called the statement of earnings or the statement of operations.
  23. Liabilities
    Economic obligations (debts) payable to an indiviual or an organization outside the business.
  24. Limited-Liability Company
    Company in which each member is only liable for his or her own actions or thise under his or her control.
  25. Limited-Liability Partnership
    Company in which each partner is only liable for his or her own actions or those under his or her control.
  26. Management Accounting
    The branch of accounting that focuses on information for internal decision makers of a business.
  27. Mutual Agency
    The ability of partners in a partnership to commit other partners and the business to a contract.
  28. Net Income
    Excess of total revenues over total expenses. Also called net earnings or net profit.
  29. Net Loss
    Excess of total expenses over total revenues.
  30. Objectivity Principle
    Principle hat asserts that data are verifiable and objective. Also called the reliability principle.
  31. Owner's Equity
    The claim of an owner to the assets of the business.
  32. Partnership
    A business with two or more owners that is not organized as a corporation.
  33. Proprietorship
    A business with a single owner.
  34. Reliability Principle
    Principle that asserts that data are verifiable and objective. Also called the objectivity principle.
  35. Revenue
    Amounts earned by delivering goods or services to customers. Revenues increase retained earnings.
  36. Shareholder
    A person who owns stock in a corporation.
  37. Stable Monetary Unit Concept
    The concept that says that accountants assume that the dollar's purchasing power is stable.
  38. Statement of Cash Flows
    Report of cash reciepts and cash payments during a period.
  39. Statement of Earnings
    Summary of an entity's revenues, expenses, and net income or net loss for a specific period. Also called the income statement or the statement of operations.
  40. Statement of Financial Position
    An entity's assets, liabilities, and owner's equity as of a specific date. Also called the balance sheet.
  41. Statement of Operations
    Summary of an entity's revenues, expenses, and net income or net loss for a specific period. Also called the income statement or statement of earnings.
  42. Statement of Owner's Equity
    Summary of the changes in an owner's capital account during a specific period.
  43. Stock
    A document indicating ownership of a corporation. The holders of stock are called stockholders or shareholders.
  44. Stockholder
    A person who owns stock in a corporation. Also called a shareholder.
  45. Stockholders' Equity
    The claim of a corporation's owners to the assets of the business. Also called owner's equity or shareholders' equity.
  46. Transaction
    An event that affects the financial position of a particular entity and can be measured and recorded reliably.

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