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| A liability backed by the general reputation and credit standing of the debtor. |
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| The information system that measures business activities, processes that information into reports and financial statements, and communicates the results to decision makers. |
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| The most basic tool of accounting: Assets = Liabilities + Owners' Equity. |
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| An economic resource that is expected to be of benefit in the future. |
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| List of an entity's assets, liabilities, and owners' equity as of a specific date. Also called the statement of financial position. |
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| Group elected by the stockholders to set policy for a corporation and to appoint its officers. |
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| Another name for the owners' equity of a business. |
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| Money and any medium of exchange that a bank accepts at face value. |
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| The most basic form of capital stock. |
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| A business owned by stockholders. A corporation is a legal entity, an "artificial person" in the eyes of the law. |
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| Principle that states that assets and services should be recorded at their actual cost. |
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| An asset that is expected to be converted to cash, sold, or consumed during the next 12 months, or within the business's normal operating cycle if longer than a year. |
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| A debt due to be paid within 1 year or within the entity's operating cycle if the cycle is longer than a year. |
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| Distributions (usually cash) by a corporation to its stockholders. |
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| An organization or section if an organization that, for accounting purposes, stands apart from other organizations and individuals as a separate economic unit. |
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| Decrease in retained earnings that results from operations; the cost of doing business; opposite of revenues. |
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| The amount that a business could sell an asset for, or the amount that a business could pay to settle a liability. |
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| The branch of accounting that provides information to people outside the firm. |
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| Business documents that obtain from investors and creditors the cash needed to launch and sustain the business; a section of the statement of cash flows. |
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| Another name for property, plant, and equipment. |
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Term
| generally accepted accounting principles (GAAP) |
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| Accounting guidelines, formulated by the Financial Accounting Standards Board, that govern how accounting is practiced. |
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Definition
| Holds that the entity will remain in operation for the foreseeable future. |
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| A financial statement listing an entity's revenues, expenses, and net income or net loss for a specific period. Also called the statement of operations. |
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| Activities that increase or decrease the long-term assets available to the business; a section of the statement of cash flows. |
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| An economic obligation (a debt) payable to an individual or an organization outside the business. |
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Term
| limited liability company |
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Definition
| A business organization in which the business (not the owner) is liable for the company's debts. |
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| A liability that falls due beyond 1 year from the date of the financial statements. |
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| The branch of accounting that generates information for the internal decision makers of a business, such as top executives. |
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| The merchandise that a company sells to customers, also called inventory. |
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| Another name for net income. |
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| Excess of total revenues over total expenses. Also called net earnings or net profit. |
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| Excess of total expenses over total revenues. |
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| Another name for net income. |
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| A liability evidenced by a written promise to make a future payment. |
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| Another name for the reliability principle. |
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| Activities that create revenue or expense in the entity's major line of business; a section of the statement of cash flows. Operating activities affect the income statement. |
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| The claim of the owners of a business to the assets of the business. Also called capital, stockholders' equity, or net assets. |
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Definition
| The amount of stockholders' equity that stockholders have contributed to the corporation. Also called contributed capital. |
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Definition
| An association of 2 or more persons who co-own a business for profit. |
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| Another name for property, plant, and equipment. |
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Term
| property, plant, and equipment |
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Definition
| Long-lived assets, such as land, buildings, and equipment, used in the operation of the business. Also called plant assets or fixed assets. |
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| A business with a single owner. |
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| The accounting principle that ensures that accounting records and statements are based on the most reliable data available. Also called the objectivity principle. |
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| The amount of stockholders' equity that the corporation has earned through profitable operation and has not given back to stockholders. |
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Definition
| Increase in retained earnings from delivering goods or services to customers or clients. |
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| Another name for stockholder. |
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| stable-monetary-unit concept |
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Definition
| The reason for ignoring the effect of inflation in the accounting records, based on the assumption that the dollar's purchasing power is relatively stable. |
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Term
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Definition
| Reports cash receipts and cash payments classified according to the entity's major activities: operating, investing, and financing. |
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| statement of financial position |
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Definition
| Another name for the balance sheet. |
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Definition
| Another name for the income statement. |
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| statement of retained earnings |
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Definition
| Summary of the changes in the retained earnings of a corporation during a specific period. |
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Definition
| Shares into which the owners' equity of a corporation is divided. |
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Definition
| A person who owns stock in a corporation. Also called a shareholder. |
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Definition
| The stockholders' ownership interest in the assets of a corporation. |
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