Term
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Definition
| The process of collecting, recording, classifying, summarizing reporting, and analyzing financial activities. |
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Definition
| Accounting that provides financial information that managers inside the organization can use to evaluate and make decisions about current and future operations. |
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Definition
| Accounting that focuses on preparing external financial reports that are used by outsiders such as creditors, lenders, suppliers, investors, and government agencies to assess the financial strength of a business. |
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| Generally Accepted Accounting Principles (GAAP) |
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Definition
| The financial accounting rules, standards, and usual practices followed by accountants in Canada when preparing financial statements, until January 2011. |
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| International Financial Reporting Standards (IFRS) |
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Definition
| A set of globally accepted accounting standards adopted in Canada on January 1, 2011, for public companies and those private companies that chose to adopt them. |
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| Accounting Standards for Private Enterprises (ASPE) |
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Definition
| The accounting framework designed to replace Canadian GAAP for private companies. |
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Definition
| A yearly document that describes a company's financial status and usually discusses the company's activities during the past year and its prospects for the future. |
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Term
| chartered accountant (CA) |
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Definition
| An accountant who typically provides tax, audit, and management services. |
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| certified management accountant (CMA) |
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Definition
| An accountant who works primarily in industry and focuses on internal management accounting. |
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| certified general accountant (CGA) |
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Definition
| An accountant who focuses primarliry on external financial reporting. |
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Term
| chartered professional accountant (CPA) |
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Definition
| An accounting designation that unites the various accounting designations in Canada. |
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Definition
| Things of value owned by a company. |
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Definition
| What a company owes to its creditors; also called debts. |
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Definition
| The total amount of investment in the company minus any liabilities; also called networth. |
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Definition
| A method of accounting in which each transaction is recorded as at least two entries, so that the accounts or records are changed. |
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Definition
| An account that is often used to analyze financial transactions; T-accounts are named as such because they resemble a T. |
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Definition
| A list of each account and its net balance. |
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Term
| balance sheet (statement of financial position) |
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Definition
| A financial statement that summarizes a company's financial position at a specific point in time. |
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Term
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Definition
| Assets that can or will be converted to cash within the next 12 months. |
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Term
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Definition
| The speed with which an asset can be converted to cash. |
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Term
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Definition
| Long-term assets used by a company for more than a year, such as land, buildings, and machinery, also referred to as fixed assets or property, plant, and equipment (PPE). |
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Term
| amortization (depreciation) |
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Definition
| The allocation of an asset's original cost to the years in which it is expected to produce revenues. |
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Term
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Definition
| Long-term assets with no physical existence, such as patents copyrights, trademarks, and goodwill. |
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Term
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Definition
| The value that has been paid for a company that exceeds the value of its net tangible assets. |
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Term
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Definition
| Short-term claims that are due within a year of the date of the balance sheet. |
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Term
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Definition
| Claims that come due more than one year after the date of the balance sheet. |
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Term
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Definition
| The amounts left over from profitable operations since the company's beginning; equal to total profits minus all dividends paid to shareholders. |
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Term
| income statement (statement of comprehensive income) |
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Definition
| A financial statement that summarizes a company's revenues and expenses, and shows its total profit or loss over a period of time. Also known as the statement of comprehensive income, statement of earnings, and the profit and loss statement. |
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Term
| revenues (also called sales and income) |
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Definition
| The dollar amount of a company's sales plus any other income it received from sources such as interest, dividends, and rents. |
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Term
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Definition
| The total dollar amount of a company's sales. |
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Term
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Definition
| The amount left after deducting sales discounts and returns and allowances from gross sales. |
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Definition
| The costs of generating revenues. |
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Term
| cost of goods sold (COGS) |
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Definition
| The total expense of buying or producing a company's goods or services. |
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Definition
| The amount a company earns after paying to produce or buy its products but before deducting operating expenses. |
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Term
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Definition
| The expenses of running a business that are not directly related to producing or buying its products. |
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Term
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Definition
| The amount obtained by subtracting all of a company's expenses from its revenues, when the revenues are more than the expenses. |
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Term
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Definition
| The amount obtained by subtracting all of a company's expenses from its revenues, when the expenses are more than revenues. |
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Definition
| A financial statement that provides a summary of the money flowing into and out of a company during a certain period, usually one year. |
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Definition
| The calculation and interpretation of financial ratios using data taken from the company's financial statements to assess its condition and performance. |
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Term
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Definition
| Ratios that measure a company's ability to pay its short-term debts as they come due. |
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Definition
| The ratio of total current assets to total current liabilities; used to measure a company's liquidity. |
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Term
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Definition
| The ratio of total current assets excluding inventory to total current liabilities; used to measure a company's liquidity. |
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Term
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Definition
| The amount obtained by subtracting total current liabilities from total current assets; used to measure a company's liquidity. |
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Term
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Definition
| Ratios that measure how well a comapny is using its resources to generate profit and how efficiently it is being managed. |
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Definition
| The ratio of net profit to net sales; also called return on sales. It measures the percentage of each sales dollar remaining after all expenses, including taxes, have been deducted. |
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Term
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Definition
| The ratio of net profit to total owner's equity; measures the return that owners receive on their investment in the company. |
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Definition
| The ratio of net profit to the number of common shares outstanding; measures the number of dollars earned by each share. |
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Definition
| Ratios that measure how well a company uses its assets. |
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Definition
| The ratio of cost of goods sold to average inventory; measures the speed with which inventory moves through a company and is turned into sales. |
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Definition
| Ratios that measure the degree and effect of a company's use of borrowed funds (debt) to finance its operations. |
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Definition
| The ratio of total liabilities to owners' equity; measures the relationship between the amount of debt financing and the amount of equity financing (owner's funds). |
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