Term
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Definition
| Recording, classifying, summarizing, and interpreting financial events |
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Term
| Managerial accounting is... |
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Definition
| Accounting used to provide information and analyses to managers within the organization to assist them in decision making. |
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Term
| Financial accounting is... |
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Definition
| Accounting information and analyses prepared for people outside the organization |
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Term
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Definition
| A yearly statement of the financial condition, progress, and expectations of an organization |
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Term
| A Chartered Accountant (CA) is... |
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Definition
| An accountant who has, met the examination, education, and experience requirements of the CA profession |
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Term
| A certified management accountant (CMA) is... |
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Definition
| An accountant who has met the examination, education, and experience requirements of the Society of Management Accountants of Canada |
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Term
| A certified general accountant (CGA) is... |
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Definition
| An accountant who has met the examination, education, and experience requirements of the Certified General Accountants Association of Canada |
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Term
| A private accountant is... |
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Definition
| An accountant who works for a single firm, government agency, or non-profit organization |
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Term
| A public accountant is... |
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Definition
| An accountant who provides his or her accounting services to individuals or businesses on a fee basis. |
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Term
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Definition
| The job of reviewing and evaluating the records used to prepare a company's financial statements |
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Term
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Definition
| An evaluation and unbiased opinion about the accuracy of a company's financial statements |
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Term
| The accounting cycle is... |
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Definition
| A six-step procedure that results in the preparation and analysis of the two major financial statements. |
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Term
| The two major financial statements are... |
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Definition
| The balance sheet and the income statement |
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Term
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Definition
| The recording of businesses transactions |
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Term
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Definition
| The record book or computer program where accounting data are first entered |
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Term
| Double-entry bookkeeping is... |
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Definition
| The concept of writing every business transaction in two places |
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Term
| The fundamental accounting equation is... |
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Definition
| Assets = liabilities + owner's equity (OE) |
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Term
| What is the basis for the balance sheet? |
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Definition
| The fundamental accounting equation: Assets = liabilities + owner's equity (OE) |
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Term
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Definition
| A specialized accounting book or computer program in which information from accounting journals is accumulated into specific categories and posted so that managers can find all of the information about one account in the same place |
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Term
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Definition
| A summary of all of the data in the account ledgers to show whether the figures are correct and balanced |
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Term
| A financial statement is... |
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Definition
| A summary of all of the transactions that have occurred over a particular period |
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Term
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Definition
| The financial statement that reports a firm's financial condition at a specific time |
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Term
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Definition
| Economic resources (things of value) owned by a firm |
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Term
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Definition
| How fast an asset can be converted into cash |
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Term
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Definition
| Items that can or will be converted into cash within one year |
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Term
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Definition
| Assets that are relatively permanent, such as land, buildings, and equipment |
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Term
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Definition
| Long-term assets (e.g., patents, trademarks, copyrights) that have no real physical form but do have value |
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Term
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Definition
| What the business owes to others (debts) |
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Term
| Owner's equity (OE) is... |
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Definition
| The amount of the business that belongs to the owners minus any liabilities owned by the business |
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Term
| An income statement is... |
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Definition
| The financial statement that shows a firm's profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue), and all of the resources that have left the firm, and the resulting net income |
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Term
| Net income or net loss is... |
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Definition
| Revenue left over after all costs and expenses, including taxes, are paid |
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Term
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Definition
| The value of what is received for goods sold, services rendered, and other financial services |
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Term
| Cost of goods sold (or cost of goods manufactured) is... |
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Definition
| A measure of the cost of merchandise sold or cost of raw materials and supplies used for producing items for resale |
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Term
| Gross profit (gross margin) is... |
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Definition
| How much a firm earned by buying (or making) and selling merchandise |
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Term
| Operating expenses are... |
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Definition
| Cots involved in operating a business, such as rent, utilities, and salaries |
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Term
| A cash flow statement is... |
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Definition
| A financial statement that reports cash receipts and disbursements related to a firm's three major activities; operations, investing, and financing |
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Term
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Definition
| The difference between cash coming in and cash going out of a business |
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Term
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Definition
| The systematic write-off of the cost of a tangible asset over its estimated useful life |
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Term
| First in, first out (FIFO) is... |
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Definition
| An accounting method for calculating cost of inventory; it assumes that the first goods to come in are the first to go out |
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Term
| Last in, first out (LIFO) is... |
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Definition
| An accounting method for calculating cost of inventory; it assumes that the last goods to come in are the first to go out |
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Term
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Definition
| The assessment of a firm's financial condition and performance through calculations and interpretations of financial ratios developed from the firm's financial statements |
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Term
| The job of an auditor is to... |
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Definition
| Review and evaluate the standards used to prepare a company's financial statements. An independent audit is conducted by a public accountant and is an evaluation and unbiased opinion about the accuracy of company financial statements |
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Term
| What are the six steps of the accounting cycle? |
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Definition
1) analyzing documents
2) recording information into journals
3) posting that information into edgers
4) developing a trial balance
5) preparing financial statements
6) analyzing financial statements |
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Term
| What are the four key categories of ratios? |
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Definition
1) liquidity ratios
2) leverage (debt) ratios
3) profitability (performance) ratios
4) activity ratios |
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Term
| What are the major accounts of the balance sheets? |
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Definition
| Assets such as buildings and machinery. Liabilities (amounts owed to others such as creditors and bondholders. Owner's equity which is the value of the things the firm owns (assets) minus any liabilities. |
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Definition
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