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Universities » Saint Joseph's University (SJU) » ACC - Accounting » 1011 - Financial Accounting » Flash Cards

Chapters 1 vocab - Flashcards

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Class:ACC 1011 - Financial Accounting
Subject:Accounting
University:Saint Joseph's University
Term:Intersession 2011
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business entities organized to earn a profit. one of three types: sole proprietorship, partnership, or a corporation.
sole proprietorship a form of an organization with a single owner
economic entity concept the assumption that a single identifiable unit must be accounted for in all situations
partnership a business owned by 2 or more individuals: organization used by law firms and accounting firms
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corporation 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
bond a certificate that represents a corporation's promise to repay a certain amount of money in the future
non business entity an organization operated for some purpose other than to earn a profit.
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liability an obligation of a business
capital stock indicates the owners of a corporation alternative term is shareholder
creditor alt term is lender to someone to whom a party has debt
asset a future economic benefit
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revenue an inflow of assets resulting from the sale of goods and services
expense an outflow of assets resulting from the purchase of goods and services.
accounting the process of identifying measuring and communicating economic info to various users
management accounting the branch of accounting concerned with providing management with information to facilitate planning and control.
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financial accounting the branch of accounting concerned with the preparation of financial statements for outsider use
owner's equity the owners claims on the assets of an entity
stockholders equity the stockholder's equity in a corporation
retained earnings 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
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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
Income Statement (statement of income) 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.
net income profit earnings. bottom of the income statement the excess of revenues over expenses.
dividends a distribution of the net income of a business to it's owners
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statement of cash flows 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.
statement of retained earnings the statement that summarizes the income earned and the dividends paid over the life of a business
cost principle original or historical cost assets are recorded at the cost to acquire them
going concern the assumption that an entity is not in the process of liquidation and that it will continue indefinitely.
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Monetary Unit the 'yard stick' used to measure amounts in the financial statements; the dollar in the US.
time period assumption accountants assume that it is possible to prepare an income statement that accurately reflects net income or earnings for a specific time period. used as a basis for preparing financial statements.
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.
Securities and Exchange Commission SEC the federal agency with ultimate authority to determine the rules for preparing statements for company whose stock is sold to the public
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Financial Accounting Standards Board (FASB) the group in the private sector with authority to to set accounting standards.
American Institute of Certified Accountants (CPA) 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
Public Company Accounting Oversight Board (PCAOB) 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.
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Auditing 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.
Sarbanes-Oxley Act of 2002 a United States federal law enacted on July 30, 2002, which set new or enhanced standards for all U.S. reform to corporate accountability
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 business entitiesorganized to earn a profit. one of three types: sole proprietorship, partnership, or a corporation.
 sole proprietorshipa form of an organization with a single owner
 economic entity conceptthe assumption that a single identifiable unit must be accounted for in all situations
 partnershipa business owned by 2 or more individuals: organization used by law firms and accounting firms
 corporationa form of entity organized under the laws of a particular state: ownership evidenced by shares of stock
 share of stocka certificate that acts as evidence of ownership in an organization
 bonda certificate that represents a corporation's promise to repay a certain amount of money in the future
 non business entityan organization operated for some purpose other than to earn a profit.
 liabilityan obligation of a business
 capital stockindicates the owners of a corporation alternative term is shareholder
 creditoralt term is lender to someone to whom a party has debt
 asseta future economic benefit
 revenuean inflow of assets resulting from the sale of goods and services
 expensean outflow of assets resulting from the purchase of goods and services.
 accountingthe process of identifying measuring and communicating economic info to various users
 management accountingthe branch of accounting concerned with providing management with information to facilitate planning and control.
 financial accountingthe branch of accounting concerned with the preparation of financial statements for outsider use
 owner's equitythe owners claims on the assets of an entity
 stockholders equitythe stockholder's equity in a corporation
 retained earningsrepresents 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 sheetstatement 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
 Income Statement (statement of income) 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.
 net incomeprofit earnings. bottom of the income statement the excess of revenues over expenses.
 dividendsa distribution of the net income of a business to it's owners
 statement of cash flowsthe 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.
 statement of retained earningsthe statement that summarizes the income earned and the dividends paid over the life of a business
 cost principleoriginal or historical cost assets are recorded at the cost to acquire them
 going concernthe assumption that an entity is not in the process of liquidation and that it will continue indefinitely.
 Monetary Unitthe 'yard stick' used to measure amounts in the financial statements; the dollar in the US.
 time period assumptionaccountants assume that it is possible to prepare an income statement that accurately reflects net income or earnings for a specific time period. used as a basis for preparing financial statements.
 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.
 Securities and Exchange Commission SECthe federal agency with ultimate authority to determine the rules for preparing statements for company whose stock is sold to the public
 Financial Accounting Standards Board (FASB)the group in the private sector with authority to to set accounting standards.
 American Institute of Certified Accountants (CPA)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
 Public Company Accounting Oversight Board (PCAOB)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.
 Auditingthe 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.
 Sarbanes-Oxley Act of 2002a United States federal law enacted on July 30, 2002, which set new or enhanced standards for all U.S. reform to corporate accountability
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