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Flashcards in Reverse Chapter 1 Vocabulary Deck (25):
1

The information system that identifies, records, and communicates the economic events of an organization to interested users.

Accounting

2

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.

Annual Report

3

Resources owned by a business.

Assets

4

A report prepared 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 accounting principles.

Auditor's Report

5

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

Balance Sheet

6

Assets = Liabilities + Stockholders' Equity

Basic Accounting Equation

7

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

Certified Public Accountant (CPA)

8

Term used to describe the total amount paid in by stockholders for the shares they purchase.

Common Stock

9

A business organized as a separate legal entity owned by stockholders.

Corporation

10

Payments of cash from a corporation to its stockholders.

Dividends

11

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

Expenses

12

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

Income Statement

13

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

Liabilities

14

A section of the annual report that presents management's views on the company's ability to pay near-term obligations, its ability to fund operations and expansion, and its results of operations.

Management Discussion and Analysis (MD&A)

15

The amount by which revenues exceed expenses.

Net Income

16

The amount by which expenses exceed revenues.

Net Loss

17

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

Notes to the Financial Statements

18

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

Partnership

19

The amount of net income retained in the corporation.

Retained Earnings

20

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

Retained Earnings Statement

21

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.

Revenue

22

Regulations passed by Congress to reduce unethical corporate behavior.

Sarbanes-Oxley Act (SOX)

23

A business owned by one person.

Sole Proprietorship

24

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

Statement of Cash Flows

25

The owners' claim to assets.

Stockholders' Equity