Chapter 16 Understanding Accounting and Financial Information Flashcards Preview

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Flashcards in Chapter 16 Understanding Accounting and Financial Information Deck (39)
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1
Q

Managerial Accounting

A

Accounting used to provide information and analyses to managers inside the organization to assist them in decision making

2
Q

Financial Accounting

A

Accounting information and analyses prepared for people outside the organization

3
Q

Annual Report

A

A yearly statement of financial condition, progress and expectations of an organization

4
Q

Compliance

A

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

5
Q

Independent Audit

A

An evaluation and unbiased opinion about the accuracy of a companies financial statements

6
Q

Forensic Accounting

A

A relatively new area of accounting that focuses its attention on fraudulent activity

7
Q

Tax Accounting

A

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

8
Q

Private Accountant

A

An accountant who works for a single firm, government agency or non-profit organization

9
Q

Public Accountant

A

An accountant who provides his or her accounting services to individuals or businesses on a fee basis

10
Q

Chartered Accountant

A

An accountant who has met the examination, education, and experience requirements of the society of management accountants of canada

11
Q

Certified Management Accountant

A

An accountant who has met the examination, education and experience requirements of the society of management accountants of canada

12
Q

Accounting

A

The recording, classifying, summarizing and interpreting of financial events to provide management and other interested parties the financial information they needs to make good decisions

13
Q

Accounting Cycle

A

A six-step procedure that results in the preparation and analysis of the major financial statements

14
Q

Bookkeeping

A

The recording of business transactions

15
Q

Journal

A

The record book where accounting data is first entered

16
Q

Double-entry Bookkeeping

A

The concept of every business transaction affecting at least 2 accounts

17
Q

Fundamental Accounting Equation

A

Assets are equal to liabilities pus owners equity; this is the basis for the balance sheet

18
Q

Ledger

A

A specialized accounting book in which information from accounting journals is accumulated into accounts and posted so that managers can find all of the information about a specific account in one place

19
Q

Trial Balance

A

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

20
Q

Financial Statement

A

A summary of all of the transactions that have occured over a particular period

21
Q

Balance Sheet

A

The financial statement that reports a firms financial condition at a specific time and is composed of 3 major types of accounts: assets, liabilities and owners equity

22
Q

Assets

A

Economic resources owned by a firm

23
Q

Liquidity

A

How fast an asset can be converted into cash

24
Q

Current Assets

A

Items that can be converted into cash within one year

25
Q

Capital Assets

A

Assets that are relatively permanent, such as land, buildings or equipment

26
Q

Intangible Assets

A

Long term assets that have no real physical form but do have value

27
Q

Liabilities

A

What the business owes to others

28
Q

Accounts Payable

A

Current Liabilities are bills a company owes to others for merchandise or services purchased on credit but not paid for yet

29
Q

Notes Payable

A

Short term or long term liabilities that a business promises to repay by a certain date

30
Q

Bonds Payable

A

Long term liabilities that represent money lent to a firm that must be paid back

31
Q

Taxes Payable

A

Sales taxes and GST or HST collected and income tax payable

32
Q

Owners Equity

A

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

33
Q

Retained Earnings

A

The accumulated earnings from a firms profitable operations that remains in the business and not paid out to shareholders or dividends

34
Q

Net income

A

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

35
Q

Gross Profit

A

How much a firm earned by buying and selling merchandise

36
Q

Operating Expenses

A

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

37
Q

Cash Flow

A

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

38
Q

Amortization

A

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

39
Q

Matching Principle

A

Revenues are recorded with earned and expenses are recorded when incurred