Glossary of Terms Flashcards
Accounting
A system of providing “quantitative information, primarily financial in nature, about economic entities that is intended to be useful in making economic decisions.”
Accounting Equation
Assets = Liabilities + Owners’ Equity
Accounts Payable
The flip side of accounts receivable—when one company sells on credit, creating for itself an account receivable, the company on the other side of the transaction is buying on credit, creating an account payable.
Accounts Receivable
Amounts owed to a business by its credit customers and are usually collected in cash within 10 to 60 days.
Accumulated Depreciation
Reflects the wear and tear, or depreciation, of these items since they were originally purchased.
Accumulated Other Comprehensive Income
The grouped together and reported changes which companies experience increases and decreases in equity each year because of the movement of market prices or exchange rates
Activity-based Costing (ABC)
A method of attributing overhead costs to products based on measurable factors that relate to activities that create overhead costs.
Additional Paid-in Capital
Invested by stockholders that exceeds the par value of the issued shares.
American Institute of Certified Public Accountants (AICPA)
The professional organization of certified public accountants in the United States.
Asset
Probable future economic benefit obtained or controlled by a particular entity as a result of past transactions or events.
Asset Mix,
The proportion of total assets in each asset category, is determined to a large degree by the industry in which the company operates.
Asset Turnover
Sales divided by assets and is interpreted as the number of dollars in sales generated by each dollar of assets.
Assets
Assets are the firm’s economic resources, formally defined as “probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events
