Term
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Definition
| An information and measurement system that identifies, records, and communicates relevant, reliable, and comparable info. |
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Term
| Recordkeeping (bookkeeping) |
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Definition
| Recording of transactions and events, either manually or electronically. |
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Term
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Definition
| NOT directly involved in running the organization (examples: shareholders (investors), lenders, directors, customers, suppliers, regulators, lawyers, brokers, non-executive employees and labor unions, voters, legislators, government officials, and the press) |
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Term
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Definition
| Those directly involved in managing and operating an organization. (examples: CEO, CFO, CAE, treasurer, and other executive and managerial level employees) |
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Term
| Four broad areas of opportunities |
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Definition
| Financial, Managerial, Taxation, and Accounting-related |
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Term
| 3 step process for making ethical decisions |
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Definition
| 1. Identify ethical concerns 2. Analyze options 3. Make ethical decision |
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Term
| Three factors for a person to commit fraud |
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Definition
| 1. Opportunity 2. Pressure (incentive) 3. Rationalization (attitude) |
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Term
| Generally accepted accounting principles (GAAP) |
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Definition
| Aims to make info relevant, reliable, and comparable. Financial accounting is governed by these concepts/rules |
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Term
| Securities and Exchange Commission (SEC) |
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Definition
| A government agency; has the legal authority to set GAAP. |
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Term
| Financial Accounting Standards Board (FASB) |
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Definition
| A private-sector group that sets both broad/specific principles. |
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Term
| International Accounting Standards Board (IASB) |
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Definition
| An independent group issues International Financial Reporting Standards (IFRS) that identify preferred accounting principles. |
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Term
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Definition
| Objectives, Qualitative Characteristics, Elements, Recognition & Measurement |
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Term
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Definition
- one owner allowed
- not business taxed
- no limited liability
- a separate business entity for accounting purposes
- NOT a separate LEGAL entity from owner
- No unlimited life |
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Term
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Definition
- Owned by two or more people, called partners
- Jointly liable for tax/other obligations
- NOT legally separate from its owners
- Unlimited liability
- No unlimited life |
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Term
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Definition
- A business legally separate from its owner(s)
- Responsible for its own acts and its own debts
- Separate legal status
- Shareholders are not personally liable for corporate acts/debts
- Limited liability
- Ownership of all corporations is divided into units called shares or stock |
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Term
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Definition
| Help curb financial abuses at companies that issue their stock to the public; requires that companies apply both accounting oversight and stringent internal controls. |
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Term
| Dodd-Frank Wall Street Reform and Consumer Protection Act |
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Definition
| To promote accountability and transparency in the financial system, to put an end to the notion of "too big to fail." Protect the consumers from abusive financial services. |
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Term
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Definition
| Assets = Liabilities + Equity |
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Term
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Definition
| Resources a company owns/control (The term receivable is used to refer to an asset that promises a future inflow of resources) |
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Term
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Definition
| Creditors' claims on assets. (The term payable refers to a liability that promises a future outflow of resources, i.e. wages payable to workers, accounts payable to suppliers, notes payable to banks) |
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Term
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Definition
| Owner's claims on assets, and is equal to assets minus liabilities (consists of four elements: owner, capital. owner, withdrawal. revenues. expenses. |
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Term
| Expanded accounting equation |
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Definition
| Assets = Liabilities + Equity (Owner, capital - owner, withdrawal + Revenues - Expenses) |
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Term
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Definition
| Describes a company's revenues and expenses along with the resulting net income or loss over a period of time due to earnings activities. (total revenues - total expenses = net income) |
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Term
| Statement of owner's equity |
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Definition
| Explains changes in equity from net income (or loss) and from any owner investments and withdrawals over a period of time. |
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Term
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Definition
| Describes a company's financial position (types and amounts of assets, liabilities, and equity) at a point in time. |
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Term
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Definition
| Identifies cash inflows (receipts) and cash outflows (payments) over a period of time. |
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Term
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Definition
| The goal of accounting is to provide useful information for decision making. For information to be useful, it must be trusted. This demands ethical behavior in accounting. |
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Term
| The three major activites of organizations |
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Definition
| Financing, investing, and operating. |
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