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| The process of collecting financial data, organizing and analyzing it using agreed-upon accounting rules, and reporting the results in financial statements. |
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| The financial information system a company uses to measure, record, analyze, and report all the transactions involved in its value-creation process. |
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| The activities needed to monitor and track all of the financial transactions related to making and selling goods and services. |
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| The act of calculating the reduced value of the assets a company uses to make and sell its products. |
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| Generally Accepted Accoounting Principles |
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| A se tof accounting rules and procedures U.S. companies follow to ensure their financial standing is being reported accurately and honestly. |
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| Certified Public Accountants |
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| People who have taken 150 hours of accounting courses and have passed the CPA exam administered by the American Institute of Certified Public Accountants. |
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| The formal evaluation of the fairness and reliability of a company's financial statements. |
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| Accountants who specialize in preparing and analyzing the financial data used by managers. |
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| Accountants who specialize in preparing financial date, following GAAP rules, for use by outside stakeholders. |
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| A summary of the financial condition of a business at the end of a day of a specific reporting period. |
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| The productive resources a company owns as well as all of its financial investments. |
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| The financial obligations of a company incurs by borrowing money or buying productive resources on credit. |
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| The total capital invested in a company over time as well as the past profits it has retained in its business. |
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| Assets listed in the firm's balance sheet in order of how fast they can be converted into cash. |
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| The total value of a company's cash. accounts receivable, inventory, and prepaid expenses. |
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| Debts that are payable within one year's time, including accounts payable and accrued (to get bigger) expenses. |
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| The sum of the capital stock invested in a business in addition to its retained earnings. |
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| The financial report that summarizes the results of a company's profit-making activities in a specific time period. |
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| The amount of net income, profit, or earnings a company reports on the bottom line of its income statement. |
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| An accounting rule that requires that the expenses incurred to make and sell products be deducted from the revenues generated by their sale during the same accounting period. |
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| Accrual basis of accounting |
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Definition
| The principle that a company's income statement should reflect the revenue received when the company makes a sale, not when a payment is actually received. |
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Definition
| The amount of money left over after a firm deducts the cost of goods it has sold from the revenues earned from them. |
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| A company's total profit after deducting the cost of the goods it has sold as well as all of its other expenses. |
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| A financial report showing how much cash a company generated during a specific time period, including where the cash came from and how it was used. |
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| The value of a company's assets that can be converted into cash immediately. |
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| The amount of cash left over after a company sutracts its current liabilities from its current assets. |
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| Ratios that measure different aspects of a company's performance. |
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| A measure of how quickly a firm's inventory is being sold. |
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| A measure of how well a company's assets are turned over or being put into use or generate sales. |
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| A measure of how much of each sales dollar is left over after a firm pays for the cost of goods sold. |
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| A measure of how much profit a company generates from its sales. |
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| A measure of how much profit a company has earned on each $100 of stockholders' equity invested in the business. |
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Definition
| A measure of how much profit a company has earned for each share of its stock issued. |
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| Return on invested capital |
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Definition
| A measure of how much profit a company generates for each dollar invested in its business. |
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