Accounting 1: Chapter 1

  1. Accounting
    The information system that identifies, records, and communicates the economic events of an organization to interested users
  2. Assets
    Resources a business owns
  3. Basic Accounting Equation
    Assets= Liabilities + Owner's Equity
  4. Bookkeeping
    A part of accounting that involves only the recordiung of economic events
  5. Balance Sheet
    A financial statement that reports the asets, liabilities, and owner's equity ata specific date
  6. Corporation
    A business organized as a separate legal entity under state corporation law, having ownership divided into transferable shares of stock
  7. Cost Principle
    An accounting principle that states that companies should record assets at their cost
  8. Drawings
    Withdrawal of cash or other assets from an unincorporated business for the personal use of the owner(s)
  9. Economic Entity Assumption
    An asssumption that requires that the activites of the entity be kept separate and distinct from the activities of its owner and all other economic entities
  10. Ethics
    The standards of conduct by which one's actions are judged as right or wrong, honest or dishonest, fair or not fair
  11. Expenses
    The cost of assets consumed or services used in the process of earning revenue
  12. Financial Accounting
    The field of accounting that provides economic and financial information for investors, creditors, and other external users
  13. Financial Accounting Standards Board (FASB)
    A private organization that establishes generally accepted accountant principles (GAAP)
  14. Generally Accepted Accounting Principles (GAAP)
    Common standards that indicate how to report economic events
  15. Income Statement
    A financial statement that presents the revenues and expenses and resulting net income or net loss of a company for a specific period of time
  16. International Accounting Standards Board (IASB)
    An accounting standard-setting body that issues standards adopted by many countries outside of the United States
  17. Investments by owner
    The assets an owner puts into the business
  18. Liabilities
    Creditor claims on total assets
  19. Managerial Accounting
    The field of accounting that provides internal reports to help users make decisions about their companies
  20. Monetary Unit Assumption
    An assumption stating that companies include in the accounting records only transaction data that can be expressed in terms of money
  21. Net Income
    The amount by which revenues exceed expenses
  22. Net Loss
    The amount by which expenses exceed revenues
  23. Owner's Equity
    The ownership claim on total assets
  24. Owner's Equity Statement
    A financial statement that summarizes the changes in owners equity for a specific period of time
  25. Partnership
    A business owned by two or more persons asssociated as partners
  26. Proprietorship
    A business owned by one person
  27. Revenues
    The gross increase in owner's equity resulting from business activities entered into for the purpose of earning income
  28. Sarbanes-Oxley Act of 2002 (SOX)
    Law passed by Congress in 2002 intended to reduce unethical corporate behavior
  29. Securities and Exchange Commission (SEC)
    A government agency that requires companies to file financial reports in accordance with generally accepted accounting principles
  30. Statement of Cash Flows
    A financial statement that summarizes information about the cash inflows (receipts) and cash outflows (payments) for a specific period of time
  31. Transactions
    The economic events of a business that are recorded by accountants
Card Set
Accounting 1: Chapter 1
Accounting 1: Chapter 1