Term
| Primary Objective of external financial reporting |
|
Definition
| To provide useful economic information about a business to help external parties, primarily investors and creditors; make sound financial decisions |
|
|
Term
| Separate-entity assumption |
|
Definition
| States that business transactions are accounted for separately from the transactions of owners. |
|
|
Term
| Unit-of-Measure assumption |
|
Definition
| States that accounting information should be measured and reported in the national monetary unit |
|
|
Term
|
Definition
| (going concern assumption) states that businesses are assumed to continue to operate into the foreseeable future |
|
|
Term
|
Definition
| economic resources with probable future benefits owned or controlled by an entity as a result from a transaction |
|
|
Term
| Historical Cost principle |
|
Definition
| Requires assets to be recorded at historical cost that, on the date of the transaction, is cash paid plus the current dollar value of all noncash considerations also given in the exchange |
|
|
Term
|
Definition
| Assets that will be used or turned into cash within one year. Inventory is always considered a current asset regardless of the time needed to produce and sell it |
|
|
Term
|
Definition
| Probable debts or obligations of the entity that result from past transactions, which will be paid with assets or services |
|
|
Term
|
Definition
| Obligations that will be settled by providing cash, goods, or services within the coming year |
|
|
Term
|
Definition
| (owners equity) The financing provided by the owners and business operations |
|
|
Term
|
Definition
| Results from owners providing cash to the business |
|
|
Term
|
Definition
| The cumulative earnings of a company that are not distributed to the owners and are reinvested in the business |
|
|
Term
|
Definition
| 1. an exchange of assets or services for assets, services or promises to pay between a business and one or more external parties to a business or 2. a measureable internal event such as the use of assets in operations |
|
|
Term
|
Definition
| A standardized format that organizations use to accumulate the dollar effect of transactions on each financial statement item |
|
|
Term
|
Definition
| The process of studying a transaction to determine its economic effect on the business |
|
|
Term
|
Definition
| On the left side of the account |
|
|
Term
|
Definition
| On the right side of the account |
|
|
Term
|
Definition
| An acounting method for expressing the effects of a transaction on accounts in a debit=credit format |
|
|
Term
|
Definition
| A tool for summarizing transaction effects for each account, determining balances, and drawing inferences about a company's activities |
|
|
