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Flashcards in Reversed Chapter (1) Deck (53):
1

The form of balance sheet that resembles the basic format of the accounting equation; with assets on the left side and Liabilities and Stockholder’s Equity sections on the right side.

account form

2

An information system that provides reports to stakeholders about the economic activities and condition of a business.

accounting

3

A list of the assets; liabilities; and owner’s equity as of a specific date; usually at the close of the last day of a month or a year.

balance sheet

4

An organization in which basic resources (inputs); such as materials and labor; are assembled and processed to provide goods or services (outputs) to customers.

business

5

A concept of accounting that limits the economic data in the accounting system to data related directly to the activities of the business.

business entity concept

6

An economic event or condition that directly changes an entity’s financial condition or directly affects its results of operations.

business transaction

7

The process of transferring temporary accounts balances to permanent accounts at the end of the accounting period.

Commission

8

The stock outstanding when a corporation has issued only one class of stock.

common stock

9

A business organized under state or federal statutes as a separate legal entity.

corporation

10

A concept of accounting that determines the amount initially entered into the accounting records for purchases.

cost concept

11

Distribution of a corporation’s earnings to stockholders.

dividends

12

The amount by which revenues exceed expenses.

earnings

13

An integrated business and information system used by companies to plan and control both internal and supply chain operations.

equity

14

Moral principles that guide the conduct of individuals.

ethics

15

Assets used up or services consumed in the process of generating revenues.

expenses

16

Revenue from providing services.

fees earned

17

The branch of accounting that is concerned with recording transactions using generally accepted accounting principles (GAAP) for a business or other economic unit and with a periodic preparation of various statements from such records.

financial accounting

18

The authoritative body that has the primary responsibility for developing accounting principles.

Financial Accounting Standards Board (FASB)

19

Financial reports that summarize the effects of events on a business.

financial statements

20

Generally accepted guidelines for the preparation of financial statements.

generally accepted accounting principles (GAAP)

21

A type of financial accounting report that is distributed to external users. The term “general purpose” refers to the wide range of decision-making needs that the reports are designed to serve.

general-purpose financial statements

22

A summary of the revenue and expenses for a specific period of time; such as a month or a year.

income statement

23

Money received for interest.

interest revenue

24

An organization that issues International Financial Reporting Standards for many countries outside the United States.

International Accounting Standards Board (IASB)

25

The rights of creditors that represent debts of the business.

liabilities

26

A business form consisting of one or more persons or entities filing an operating agreement with a state to conduct business with limited liability to the owners; yet treated as a partnership for tax purposes.

limited liability company (LLC)

27

method A method of valuing inventory that reports the inventory at the lower of its cost or current market value (replacement cost).

management

28

A type of business that changes basic inputs into products that are sold to individual customers.

manufacturing business

29

The comprehensive budget plan linking all the individual budgets related to sales; cost of goods sold; operating expenses; projects; capital expenditures; and cash.

matching concept

30

A type of business that purchases products from other businesses and sells them to customers.

merchandising business

31

An approach to transfer pricing that allows managers of decentralized units to agree (negotiate) among themselves as to the transfer price.

net income

32

The amount by which expenses exceed revenues.

net loss

33

A concept of accounting that requires accounting records and the data reported in financial statements to be based on objective evidence.

objectivity concept

34

The owner’s right to the assets of the business.

owner’s equity

35

An unincorporated business form consisting of two or more persons conducting business as co-owners for profit.

partnership

36

Items such as supplies that will be used in the business in the future.

prepaid expenses

37

The field of accounting whereby accountants are employed by a business firm or a not-for-profit organization.

private accounting

38

The difference between the amounts received from customers for goods or services provided and the amounts paid for the inputs used to provide the goods or services.

profit

39

A business owned by one individual.

proprietorship

40

The field of accounting where accountants and their staff provide services on a fee basis.

public accounting

41

Public Company Accounting Oversight Board (PCAOB) A new oversight body for the accounting profession that was established by the Sarbanes- Oxley Act.

Public Company Accounting Oversight Board (PCAOB)

42

A leverage ratio that measures the margin of safety of long-term creditors; calculated as the net fixed assets divided by the long-term liabilities.

ratio of liabilities to stockholders’

43

Money received for rent.

rent revenue

44

Net income retained in a corporation.

retained earnings

45

A summary of the changes in the retained earnings in a corporation for a specific period of time; such as a month or a year.

retained earnings statement

46

Increases in assets from performing services or delivering products to customers.

revenues

47

The total amount charged customers for merchandise sold; including cash sales and sales on account.

sales

48

The relative distribution of sales among the various products available for sale.

Sarbanes-Oxley Act

49

An act passed by Congress to restore public confidence and trust in the financial statements of companies.

Securities and Exchange

50

A business providing services rather than products to customers.

service business

51

A summary of the cash receipts and cash payments for a specific period of time; such as a month or a year.

statement of cash flows

52

The owners’ equity in a corporation.

stockholders’ equity

53

A concept of accounting requiring that economic data be recorded in dollars.

unit of measure concept