Download Chapters 1 vocab | ACC 1011 - Financial Accounting and more Quizzes Financial Accounting in PDF only on Docsity!
business entities
organized to earn a profit. one of three types: sole proprietorship, partnership, or a corporation. TERM 2
sole proprietorship
DEFINITION 2 a form of an organization with a single owner TERM 3
economic entity
concept
DEFINITION 3 the assumption that a single identifiable unit must be accounted for in all situations TERM 4
partnership
DEFINITION 4 a business owned by 2 or more individuals: organization used by law firms and accounting firms TERM 5
corporation
DEFINITION 5 a form of entity organized under the laws of a particular state: ownership evidenced by shares of stock
share of
stock
a certificate that acts as evidence of ownership in an organization TERM 7
bond
DEFINITION 7 a certificate that represents a corporation's promise to repay a certain amount of money in the future TERM 8
non business
entity
DEFINITION 8 an organization operated for some purpose other than to earn a profit. TERM 9
liability
DEFINITION 9 an obligation of a business TERM 10
capital
stock
DEFINITION 10 indicates the owners of a corporation alternative term is shareholder
management
accounting
the branch of accounting concerned with providing management with information to facilitate planning and control. TERM 17
financial
accounting
DEFINITION 17 the branch of accounting concerned with the preparation of financial statements for outsider use TERM 18
owner's equity
DEFINITION 18 the owners claims on the assets of an entity TERM 19
stockholders equity
DEFINITION 19 the stockholder's equity in a corporation TERM 20
retained
earnings
DEFINITION 20 represents the owner's claims to the company's assets that result from it's earnings that have not been paid out into dividends paid over the life of the entity
balance
sheet
statement of financial position the financial statement that summarizes assets, liabilities and owners equity of a company. SNAPSHOT of business on a certain date, must always balance. Assets = Liabilities + Owners Equity TERM 22
Income Statement (statement of income)
DEFINITION 22 summarizes the revenues and expenses of a company for a period of time. it's a flow statement summarizes the flow of revenues and expenses for the year. TERM 23
net income
DEFINITION 23 profit earnings. bottom of the income statement the excess of revenues over expenses. TERM 24
dividends
DEFINITION 24 a distribution of the net income of a business to it's owners TERM 25
statement of cash flows
DEFINITION 25 the statement that summarizes the cash flow effects of a company's operating, financing, and investing activities for the period. in essence it shows the reader where a company got cash during the year and how it used the cash.
Generally Accepted Accounting Principles
(GAAP)
refers to the various methods, rules, practices, and other procedures that have evolved overtime in response to the need for some form of regulation over the preparation of financial statements. TERM 32
Securities and Exchange Commission
SEC
DEFINITION 32 the federal agency with ultimate authority to determine the rules for preparing statements for company whose stock is sold to the public TERM 33
Financial Accounting Standards Board (FASB)
DEFINITION 33 the group in the private sector with authority to to set accounting standards. TERM 34
American Institute of Certified Accountants
(CPA)
DEFINITION 34 the designation for an individual who has passed a uniform exam administered by the AICPA and have met other requirements as determined by the AICPA and have met other requirements as determined by individual states TERM 35
Public Company Accounting Oversight Board
(PCAOB)
DEFINITION 35 The Public Company Accounting Oversight Board (or PCAOB) is a private-sector, non-profit corporation created by the Sarbanes-Oxley Act, a 2002 United States federal law, to set auditing standards.
INternational Accounting Standards Board
(IASB)
the organization formed to develop worldwide accounting standards. TERM 37
Auditing
DEFINITION 37 the process of examining the financial statements and the underlying records of a company to render an opinion as to whether the statements are fairly presented. TERM 38
Sarbanes-Oxley Act of 2002
DEFINITION 38 a United States federal law enacted on July 30, 2002, which set new or enhanced standards for all U.S. reform to corporate accountability
