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Flashcards in Chapter 1 Deck (27):
1

accounting

is a system that collects and processes(analyzes,measures,and records) financial information about an organization and reports the information to decision makers

2

Annual Report

a report prepared by corporate management that presents financial information including financial statements, a management discussion and analysis section, notes , and an independent auditor's report

3

Assets

resources owned by a business

4

Auditor's Report

a report by an independent outside auditor stating the auditor's opinion as to the fairness of the presentation of the financial position and results of operations and their conformance with generally accepted principles

5

Balance Sheet

a financial statement that reports the assets and claims to those assets at a specific point in time

6

Asset=?

Liabilities + Stockholders' Equity

7

Certified Public Accountant(CPA)

an individual who has met certain criteria and is thus allowed to perform audits of corporations

8

Common Stock

is the investment of cash and other assets in the business directly by the owners . The owners will receive a certificate as evidence of their ownership interest on the assets.

9

Corporation

a business organized as a separate legal entity owned by stockholders

10

Dividends

payments of cash from a corporation to its stockholders

11

Expenses

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

12

Income Statement

a financial statement that reports a company's revenues and expenses and resulting net income or net loss for a specific period of time

13

Liabilities

Amounts owed to creditors in the form of debts and and other obligations

14

Net Income

The amount by which revenues exceed expenses

15

Net Loss

the amount by which expenses exceed revenues

16

Notes to the financial statements

Notes clarify information presented in the financial statements and provide additional detail

17

Partnership

A business owned by two or more persons associated as partners

18

Retained Earnings

The amount of net income retained in the corporation

19

Retained earnings statement

A financial statement that summarizes the amounts and causes of changes in retained earnings for a specific time period

20

Revenue

the increase in assets or decrease in liabilities resulting from the sale of goods or the performance of services in the normal course of business

21

Sarbanes-Oxley Act (SOX)

Regulations passed by Congress to reduce unethical corporate behavior

22

Sole Proprietorship

A business owned by one person

23

Statement of Cash Flows

A financial statement that provides financial information about the cash receipts and cash payments of a business for a specific period of time

24

Stockholders' equity

The owners' claim to assets

25

Net Income=?

Revenue-Expenses

26

Dividends

distribution of equity to the owners, Typically money received from the business to the owners. It is the owners share of the business profits .

27

interest income

extra amount of money that is paid by the borrower to the lender for use of the lender's moeny