Terms and Concepts Flashcards Preview

Financial Literacy > Terms and Concepts > Flashcards

Flashcards in Terms and Concepts Deck (12):
0

A statement of financial position. Lists the entities assets liabilities and owners equity.

A balance sheet

1

Details the entities operating performance during a specific time. Subtracts expenses from revenues.

Income statement

2

Details the sources and uses of cash by the entity over an accounting period.

Statement of cash flows.

3

Sets accounting standards.

FASB (the financial accounting standards board)

4

Accounts are kept for an entity as distinct from the people who run or do business with the entity. Allows the accountant to draw a virtual boundary

Entity

5

Financial accounting only deals with things that can be represented in monetary terms

Money measurement

6

An entity is expected to remain in operation for the indefinite future

Going concern

7

An entity should use the same accounting methods and procedures from period to period unless it has a sound reason to change methods

Consistency concept

8

An entity need only apply proper accounting to items that are material. An item is material if it's disclosure would impact the decisions of the users of the account

Materiality concept

9

record of economic impact of each transaction rather than the cash flows

Accrual accounting

10

Record of cash impact of each transaction

Cash basis accounting

11

Generally accepted accounting principals Guidelines that all managers and auditors must follow while preparing and auditing accounting information for external reporting purposes

GAAP