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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 inofmation into reports and financial statements and communicates the results to decision makers. |
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The most basic tool of accounting:
Assets=Liabilities+Owner's Equity |
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| An economic resource that is expected to be of benefit in the future. |
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| List an entry's assets, liabilities, and owners equity as of a specific date. Also called the statement of functional 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 owner's equity of a business. |
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| Money and any medium of exchange that a banks accepts at a face value. |
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| The most basic form of capital stock. |
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| See going-concern assumption. |
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| A business owned by stockholders. A corporation is a legal entitiy, an "artificial person" in the eyes of the law. |
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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 nomal operating cycle if longer than a year. |
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| A debt due to be paid within one year of within the entity's operating cycle if the cycle is longer than a year. |
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| Negative balance in retained earnings caused by net losses over a period of years. |
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| Distributions (usually cash) by a corporation to its stockholders. |
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| An organization or a section of an organization that, for accounting purposes, stands apart from other organizations and individuals as a seperate economic unit. |
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| Standards of right and wrong that transcend economic and legal boundaries. Ethical standards deal with the way we treat others and restrain our own action because of desires, expectations, or rights of others, or with our obligations to them. |
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Definition
| Decrease in retained earnings that results from operations; the cost of doing business; opposity 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 report financial information about a business entity to decision makers. |
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Definition
| Activities 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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Definition
| Another name for propery, plant, and equipment. |
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Term
| Generally Accepted Accounting Principles (GAAP) |
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Definition
| 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 operations for the foreseeable future. |
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| Historical Cost Principle |
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Definition
| Principle that states that assets and services should be recorded at their actual cost. |
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Definition
| 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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| International Financial Reporting Standards (IFRS) |
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Definition
| Accounting Guidelines, formulated by the International Accounting Standards Board (IASB). By 2014, U.S. GAAP is expected to be harmonized with IFRS. At that time, U.S. companies are expected to adopt these principles for their financial statements, so that they can be compared with those of companies from other countries. |
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Definition
| Activites that increase or decrease the long-term assets available to the busniness; a section of the statement of cash flows. |
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Definition
| Ac economic obligation (a debt) payable to an individual or an organization outside the business. |
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| Limited Liability Company (LLC) |
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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 one 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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Definition
Excess of total revenues over total expenses. Also called net earnings or net profit.
Net Income=Total Revenue-Total Expenses |
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| Excess of total expenses over total revenues. |
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| Another name for the net income. |
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| A liability evidenced by a written promise to make a future payment. |
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| Activites that create revenue of 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 busniess to the assets of the business. Also called capital, stockholders' equity, or net assets. |
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| The amount of stockholders equity that stockholders have contributed to the corporation. Also called contributed capital. |
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| An association of two or more persons who co-own a business for profit. |
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Definition
| Another name for the property, plant, and equipment. |
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| Property, Plant, and Equipment |
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Definition
| Long-lived assets, such as land, buildings, and equipment, used in the opertaion 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 amount of stockholders' equity that the corporation has earmed through profitable operation and has no given back to stockholders. |
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Definition
| Another name for stockholder. |
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Term
| Stable-Monetary-Unity Assumption |
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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 activites: 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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| A person who owns stock in a corporation. Also called a sharholder. |
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Definition
| The stockholders' ownership interest in the assets of corporation. |
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