Flashcards in Terms and Concepts Deck (12):
A statement of financial position. Lists the entities assets liabilities and owners equity.
A balance sheet
Details the entities operating performance during a specific time. Subtracts expenses from revenues.
Details the sources and uses of cash by the entity over an accounting period.
Statement of cash flows.
Sets accounting standards.
FASB (the financial accounting standards board)
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
Financial accounting only deals with things that can be represented in monetary terms
An entity is expected to remain in operation for the indefinite future
An entity should use the same accounting methods and procedures from period to period unless it has a sound reason to change methods
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
record of economic impact of each transaction rather than the cash flows
Record of cash impact of each transaction
Cash basis accounting