Business Quizz/Test Chapter 17

recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and othe interested parties the information they need to make good decisions.

accounting used to provide information and analyses to managers within the organization to assist them in decision making

a professional accountant who has met certain educational and experience requirements, passed qualifying exam in the field, and been certified by the institute of certified management accountants.

accounting information and analyses prepared for people outside the organization

sales documents/purchasing document/shipping documents/payroll records/bank records/bank records/travel records/entertainment records

• 1.entries are made into journals: recording
• 2. the effects of these journal entries are transferred or posted into ledgers: classifying
• 3. all accounts are summarized

balance sheet/ income statement/statement of cash flows/annual reports

a yearly statement of the financial condition,progress, and expectations of an organization

an accountant who works for a single firm, government agency, or nonprofit organization

an accountant who provides accounting services to individuals or business on a fee basis

an accountant who passes a series of examinations established by the american institute of certified public accountants

the job of reviewing and evaluating the records used to prepare a companys financial statements

an accountant who has bachelors degree and two years of experience in internal auditing , and who has passed an exam administrated by the institute of internal auditors.

an evaluation and unbiased opinion about the accuracy of a companys financial statements.

an accountant trained in tax law and responsible for preparing tax returns or developing tax strategies.

accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duly approved budget.

• a six-step procedure that results in the preparation and analysis of the major financial statements.
• 1.analyze source documents
• 2.record transactions in journals.
• 3.transfer journal enteries to ledger
• 4.take a trial balance
• 5.prepare financial statements
• 6.analyze financial statements

the recording of business transactions.

the record book or computer program where accounting data are first entered.

the concept of writing every business transaction in two places.

a specialized accounting book or computer program in which ingormation from accounting jounals is accumulated into specific categories and posted so that managers can find all the information about one account in the same place.

a summary of all the data in the account ledgers to show whether the figures are correct and balanced.

a summary of all the transactions that have occurred over a particular period

assets=liabilities+owners equity; this is the basis for the balance sheet

the financial statement that reports a firms financial condition at a specific time

economic resources (things of value) owned by a firm.

how fast an asset can be converted into cash

items that can or will be converted into cash within one year

assets that are relatively permanent, such as land, buildings, and equipment.

long-term assets (patents,trademarks,copyrights) that have no real physical form but do have value

what the buiness owes to others(debts)

current liabilities involving money owed to others for merchandies or services purchased on credit but not yet paid for.

short-term or long-term liabilities that a business promises to repay by a certain date.

long-term liabilities that represent money lent to the firm that must be paid back.

the amount of the business that belongs to the owners minus any liabilities owed by the business

the accumulated earnings from a firms profitable operations that were kept in the business and not paid out to stockholders in dividends

the financial statement that shows a firms profit after costs, expenses,and taxes; it summarizes all of the resources that have come into the firm(revenue), all the resources that have left the firm, and the resulting net income.

revenue left over after all costs and expenses, including taxes, are paid

the value of what is received for goods sold, services rendered, and other financial sources.

a measure of the cost of merchandise sold or cost of raw materials and supplies used for producing items for resale.

how much a firm earned by buying(or making) and selling merchandise.

costs involved in operating a business, such as rent, utilities, and salaries.

the systematic write-off of the cost of a tangible asset over its estimated useful life.

financial statement that reports cash receipts and disbursements related to a firms three major activities: operations, investments, and financing

the difference between cash coming in and cash going out of a business

the assessment of a firms financial condition and performance through calculation and interpretations of financial ratios developed from the firms fincancial statements.

measure a company's ability to turn assests into cash to pay short term debts. is basically the Acid-Test ratio

Debt to owners equity ratio- Measure the degree to which the company is fiananced by borrowed funds that must be repayed.