Term
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Definition
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Term
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Definition
-Idenitfy the event or transaction
-Record event or transaction
-Create a report to summarize info
-Analyze and Interpret report |
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Term
Gaap
(general accepted accounting principles) |
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Definition
Consists of:
-FASB- creates accounting rules
-SEC- enforces accounting rules |
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Term
Forms of Business Organizations
(type of entity) |
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Definition
1) sole proprietorship- one owner
2) partnership- two or more owners
_Corporation- Legally separated from
owners with limited
liability
(owner not held liable for corporation) |
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Term
Building Blocks of Accounting
(6 types of accounts) |
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Definition
A- Assets-something you own
L- Liability- something you owe
SE- Stockholder's Equity- Common Stock, Retained Earnings
R- Revenue- increase in equity
E- Expense- decrease in equity
D- Dividend- distribution to stockholders (choice not an obligation) |
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Term
FIRST- Basic Financial Statement
Income Statement |
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Definition
Reports entity profit for a specific time
- R(revenue)-E(expenses)= NI (net income) |
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Term
SECOND- Basic Financial Statement
Statement of Retained Earnings |
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Definition
Report entity retained earnings for a specific period of time
-BRE(beginning retained earnings) + NI (net income) - D (dividends)= ERE (end retained earnings) |
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Term
THIRD- Basic Financial Statement
Balance Sheet |
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Definition
Report position of equity at a specific period of time
ALWAYS HAS TO BALANCE
A(assets)=L(liability)+ SE (stockholder's equity |
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Term
FOURTH- Basic Financial Statement
Statement of Cash Flow |
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Definition
Reports various sources of cash during s specific point of time
-Classifies cash inflows and outflows |
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