accounting stice vocabulary ch 1d.txt

A key ingredient of reliable accounting information requiring that information be presented in an unbiased manner; neutrality relates to the concept of fairness to users.

Helps a decision maker predict future consequences based on information about past transactions and events.

Amount of net future cash inflows or outflow discounted to their present value of an appropriate rate of interest.

The process of formally recording an item in the accounting records and eventually reporting it in the financial statements; includes both the initial recording of an item and any subsequent changes related to that item.

One of two primary qualities inherent in useful accounting information; essentially, information is relevant if it will affect a decision. The key ingredients of relevance are feedback value, predictive value, and timeliness.

One of two primary qualities inherent in useful accounting information; to be reliable, information must contain the key ingredients of verifiability, neutrality, and representational faithfulness.

A key ingredient of reliable accounting information requiring that the amounts and descriptions reported in the financial statements reflect the actual results of economic transactions and events.

Securities and Exchange Commission

A U.S. government agency created to regulate the issuance and trading of securities in the United States. As part of this function, the SEC is vitally interested in financial accounting and reporting standards. The SEC has the legal authority to establish accounting standards, but it has historically relied heavily on the private sector to perform this function.

An accounting assumption that the measuring unit maintains constant purchasing power; based on this assumption, U.S. financial statements have traditionally reported items in nominal dollars without adjustment for changes in purchasing power.

All parties interested in the performance of a company.

A report that shows the total changes in all owners’ equity accounts during a period of time; provides a reconciliation of the beginning and ending owners’ equity amounts.

Statements of Financial Accounting Concepts

Quality of information that is provided on a timely basis.

A key ingredient of reliable accounting information; reported information should be based on objectively determined facts that can be verified by other accountants using the same measurement methods.

A set of guidelines established by the FASB to provide a conceptual framework for establishing and administering accounting standards.