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Accounting 1 > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Auditing

A

The examination of financial statements by a certified public accountant in order to express an
opinion as to the fairness of presentation.

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2
Q

Forensic Accounting

A

An area of accounting that uses accounting, auditing, and investigative skills to conduct
investigations into theft and fraud.

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3
Q

Management Consulting

A

An area of public accounting ranging from development of accounting and
computer systems to support services for marketing projects and merger and acquisition activities.

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4
Q

Private Accounting/Managerial Accounting

A

An area of accounting within a company that involves such activities as
cost accounting, budgeting, design, and support of accounting information systems, and tax planning and
preparation.

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5
Q

Public Accounting

A

An area of accounting in which the accountant offers expert service to the general public.

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6
Q

Taxation

A

An area of public accounting involving tax advice, tax planning, preparing tax returns, and
representing clients before governmental agencies.

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7
Q

Accounting

A

An area of public accounting involving tax advice, tax planning, preparing tax returns, and
representing clients before governmental agencies.

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8
Q

Accounting Information System

A

An area of public accounting involving tax advice, tax planning, preparing tax returns, and
representing clients before governmental agencies.

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9
Q

Assets

A

Resources a business owns.

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10
Q

Auditing

A

The examination of financial statements by a certified public accountant in order to express an opinion as to the fairness of presentation.

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11
Q

Balance Sheet

A

A financial statement that reports the assets, liabilities, and owner’s equity at a specific date.

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12
Q

Basic Accounting Equation

A

Assets = Liabilities + Owner’s equity

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13
Q

Bookkeeping

A

A part of the accounting process that involves only the recording of economic events.

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14
Q

Corporation

A

A business organized as a separate legal entity under state corporation law, having ownership divided into transferable shares of stock.

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15
Q

Data Analytics

A

The use of software and statistics to draw inferences from data.

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16
Q

Drawings

A

Withdrawal of cash or other assets from an unincorporated business for the personal use of the owner(s).

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17
Q

Economic Entity Assumption

A

An assumption that requires that the activities of the entity be kept separate and distinct from the activities of its owner and all other economic entities.

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18
Q

Ethics

A

The standards of conduct by which actions are judged as right or wrong, honest or dishonest, fair or not fair.

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19
Q

Expanded Accounting Equation

A

Assets = Liabilities + Owner’s capital − Owner’s drawings + Revenues – Expenses.

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20
Q

Expenses

A

The cost of assets consumed or services used in the process of generating revenue.

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21
Q

Fair Value Principle

A

An accounting principle stating that assets and liabilities should be reported at fair value (the price received to sell an asset or settle a liability).

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22
Q

Faithful Representation

A

Numbers and descriptions match what really existed or happened—they are factual.

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23
Q

Financial Accounting

A

The field of accounting that provides economic and financial information for investors, creditors, and other external users.

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24
Q

Financial Accounting Standards Board (FASB)

A

A private organization that establishes generally accepted accounting principles (GAAP) in the United States.

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25
Q

Forensic Accounting

A

An area of accounting that uses accounting, auditing, and investigative skills to conduct investigations into theft and fraud.

26
Q

Generally Accepted Accounting Principles (GAAP)

A

Common standards that indicate how to report economic events.

27
Q

Historical Cost Principle

A

An accounting principle that states that companies should record assets at their cost.

28
Q

Income Statement

A

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.

29
Q

International Accounting Standards Board (IASB)

A

An accounting standard-setting body that issues standards adopted by many countries outside of the United States.

30
Q

International Financial Reporting Standards (IFRS)

A

International accounting standards set by the International Accounting Standards Board (IASB).

31
Q

Investments by Owner

A

The assets an owner puts into the business.

32
Q

Liabilities

A

Creditor claims against total assets.

33
Q

Management Consulting

A

An area of public accounting ranging from development of accounting and computer systems to support services for marketing projects and merger and acquisition activities.

34
Q

Monetary Unit Assumption

A

An assumption stating that companies include in the accounting records only transaction data that can be expressed in terms of money.

35
Q

Net Income

A

The amount by which revenues exceed expenses.

36
Q

Net Loss

A

The amount by which expenses exceed revenues.

37
Q

Owner’s Equity

A

The ownership claim on total assets.

38
Q

Owner’s Equity Statement

A

A financial statement that summarizes the changes in owner’s equity for a specific period of time.

39
Q

Partnership

A

A business owned by two or more persons associated as partners.

40
Q

Proprietorship

A

A business owned by one person.

41
Q

Relevance

A

Financial information that is capable of making a difference in a decision.

42
Q

Revenues

A

The increases in assets or decreases in liabilities resulting from the sale of goods or the performance of services in the normal course of business.

43
Q

Sarbanes-Oxley Act (SOX)

A

Law passed by Congress intended to reduce unethical corporate behavior.

44
Q

Securities and Exchange Commission (SEC)

A

A governmental agency that oversees U.S. financial markets and accounting standard-setting bodies.

45
Q

Statement of Cash Flows

A

A financial statement that summarizes information about the cash inflows (receipts) and cash outflows (payments) for a specific period of time.

46
Q

Transactions

A

The economic events of a business that are recorded by accountants.

47
Q

Analysis

A

Using ratios, percentages, and visualizations (graphs and charts) to highlight significant financial trends and relationships.

48
Q

Interpretation

A

Explaining the uses, meaning, and limitations of reported data.

49
Q

Investors/Owners

A

Users of accounting information to decide whether to buy, hold, or sell ownership shares of a company.

50
Q

Creditors/Suppliers

A

Users of accounting information to evaluate the risks of granting credit or lending money.

51
Q

GAAP

A

Generally Accepted Accounting Principles

52
Q

FASB

A

Financial Accounting Standards Board

53
Q

SEC

A

Securities and Exchange Commission

54
Q

IASB

A

International Accounting Standards Board

55
Q

IFRS

A

International Financial Reporting Standards

56
Q

Fair Value

A

The price received to sell an asset or settle a liability.

57
Q

Economic Entity

A

any organization or unit in society.

58
Q

Governmental Accounting

A

Accounting for governmental agencies such as the SEC, IRS, FBI, or in local government positions.

59
Q

What are the three main parts of the accounting process?

A

Identify, Record, and Communicate

60
Q
A

Accounting 1 (4 decks)

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