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| the recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested parties the info they need to make good decisions |
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| accounting used to provide info and analyses to managers within the organization to assist them in decision making |
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| Certified Management Accountant (CMA) |
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| a pro accountant who has met certain edu and experience requirements, passed a qualifying exam in the field, and been certified by the Institute of Certified Management Accountants |
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| accounting info and analyses prepared for people outside the organization |
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| a yearly statement of the financial condish, progress, and expectations of an organization |
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| an accountant who works for a single firm, gov agency or non profit organization |
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| an accountant who provides accounting serves to indivi or businesses on a fee basis |
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| Certified Public Accountant (CPA) |
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| an accountant who passes a series of exams established by the American Institute of Certified Public Accountants |
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| the job of reviewing and evaluating the records used to prepare a company's financial statements |
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| Certified Internal Auditor (CIA) |
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| an accountant who has a bachelor's degree and 2 years of experience in internal auditing, and who has passed an exam administered by the Institute of Internal Auditors |
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| an evaluation and unbiased opinion about the accuracy of a company's financial statements. |
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| accountant trained in tax law and responsible for preparing tax returns or developing tax strategies |
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| Government and not-for-profit Accounting |
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| accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duly approved budget |
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| a 6 step procedure that results in the preparation and analysis of the major financial statements |
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| the recording of business transactions |
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| the record book or computer program where accounting data are first entered |
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| the concept of writing entry business transaction in two places |
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| a specialized accounting book or comp program in which info from accounting journals is accumulated into specific categories and posted so that managers can find all the info about 1 account in the same place |
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| a summary of all the data in the account ledgers to show whether the figures are correct and balanced |
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| a summary of all the transactions that have occurred over a particular period |
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| financial condition as of a specific date |
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-financial statement that shows a firm's profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue) all the resources that had left the firm, and the resulting net income
-summarizes revenues, cost of goods, and expenses for a specific period and highlights the total profit or loss the firm experienced during that period
-------profit or loss over a speific period of time |
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| provides a summary of money coming into and going out of the firm that tracks a company's cash receipts and cash payments |
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| Fundamental Accounting Equation |
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| assets = liabilities + owner equity |
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| economic resources (things of value) owned by a firm |
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| how fast an asset can be converted into cash |
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items that can or will be converted into cash within one year.
-cash, accounts receivable, inventory |
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assets that are relatively permanent
-land, buildings, equipment |
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long-term assets that have no real physical form but do have value
-patents, trademarks, copyrights |
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| what the business owes to others (Debts) |
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| Current liabilities involving money owed to others for merchandise or services purchased on credit but not yet paid for |
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| short-term or long-term liabilities that a business promises to repay by a certain date |
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| long-term liabilities that represent money lent to the firm that must be paid back |
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the amount of the business that belongs to the owners minus any liabilities owed by the business
owners equity = assets - liabilities |
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| value of things you own (assets) minus the amount of money you owe to others (liability) |
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| accumulated earnings from a frim's profitable operations that were kept in the business and not paid out to stockholders in dividends |
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| revenue left over after all costs and expenses, including taxes, are paid |
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| value of what's received from goods sold, services, rendered, and other financial sources |
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| cost of merchandise sold or cost of raw materials or parts used for producing items for resale |
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Gross Profit
(Gross Margin) |
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| how much the firm earned by buying or selling merchandise |
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costs involved in operating a business
-rent, utilities, and salaries |
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| systematic write-off of the cost of a tangible asset over its estimated useful life |
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| financial statement that reports cash receipts and disbursements related to a firms three major activities: operations, investments, and financing |
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| cash transactions associated with running the business |
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| cash used in or provided by the firm's investment activites |
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| cash raised from the issuance of new debt or equity capital or cash used to pay business expenses, past debts, or company dividends |
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the difference between cash coming in and cash going out of a business
cash coming in - cash going out |
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| assessment of a firm's financial condition and performance through calculations and interpretations of financial ratios developed from the firm's financial statements |
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current assets
____________________
current liabilities |
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