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Definition
| Generally Accepted Accounting Principles; the standards or rules of accounting used in the United States in preparation of general purpose financial statements. |
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| General purpose financial statements |
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Definition
| The financial statements, including balance sheet, income statement, and statement of cash flows, required under GAAP. |
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| Financial Accounting Standards Board. A private organization funded by the FAF and currently responsible for the establishment of GAAP in the United States. |
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Definition
| "statement of operations," "statement of profit and loss," "P & L statement" or "statement of earnings." a company's revenues less expenses and the resulting net income or net loss for a period of time. |
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Definition
| "statement of financial position." Lists as of the end of an accounting period, all of an entity's assets, liabilities and owners' equity. |
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Term
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Definition
| accrual basis accounting that governs the timing of expenses. The matching principle requires the costs of operating a company to be recorded as expenses in the period in which those costs provide benefits to the company, not necessarily when those costs are actually paid in cash. |
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Term
| Revenue recognition principle |
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Definition
| The part of accrual basis accounting that deals with the timing of revenues. This provides for revenues to be recorded in the period in which those revenues are earned, not necessarily when cash is collected from customers. |
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Term
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Definition
| The original cost of acquiring an asset. In an arm's-length transaction, an asset's cost is also its fair market value at the date of acquisition. |
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Term
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Definition
| assets and liabilities of the company as an entity separate from its owners. That means that any personal assets or liabilities of owners should not be included in the company's financial statements. |
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Definition
| The acquiring of assets or resources for a business. Loan doesn't have to be paid back. |
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| The acquiring of business assets through borrowing or the incurring of liabilities. Must be repaid in the future and has interest, but you don't give up ownership. |
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| Financial statement that shows cash movement. |
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Term
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Definition
| Sales Revenue - Sales Discounts - Sales Returns = Net Sales - Cogs |
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