Financial & Managerial Accounting Chapter 1

The form of balance sheet that resembles the basic format of the accounting equation, with assets on the left side and Liabilities and Owner's Equity sections on the right side.

The liability created by a purchase on account.

A claim against the customer created by selling merchandise or services on credit.

An information system that provides reports to stakeholders about the economic activities and condition of a business.

Assets = Liabilities + Owner's Equity.

The resources owned by a business.

A list of the assets, liabilities, and owner's equity as of a specific date, usually at the close of the last day of a month or a year.

An organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers.

A concept of accounting that limits the economic data in the accounting system to data related directly to the activities of the business.

An economic event or condition that directly changes an entity's financial condition or directly affects its results of operations.

Public accountants who have met a state's education, experience, and examination requirements.

A business organized under state or federal statutes as a separate legal entity.

A concept of accounting that determines the amount initially entered into the accounting records for purchases. They are recorded at their cost or purchase price.

Used to describe when revenues exceed expenses. (Also see net income and net profits)

Moral principles that guide the conduct of individuals.

Assets used up or services consumed in the process of generating revenues.

Revenue from providing services.

The branch of accounting that is concerned with recording transactions using generally accepted accounting principles (GAAP) for a business or other economic unit and with a periodic preparation of various statements from such records.

The authoritative body that has the primary responsibility for developing accounting principles.

Financial reports that summarize the effects of events on a business.

A type of financial accounting report that is distributed to external users. The term "general purpose" refers to the wide range of decision-making needs that the reports are designed to serve.

Generally accepted guidelines for the preparation of financial statements.

A summary of the revenue and expenses for a specific period of time, such as a month or a year.

Money received for interest.

An organization that issues International Financial Reporting Standards for many countries outside the United States.

The rights of creditors that represent debts of the business.

A business form consisting of one or more persons or entities filing an operating agreement with a state to conduct business with limited liability to the owners, yet treated as a partnership for tax purposes.

The branch of accounting that uses both historical and estimated data in providing information that management uses in conducting daily operations, in planning future operations, and in developing overall business strategies.

A type of business that changes basic inputs into products that are sold to individual customers.

A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses.

A type of business that purchases products from other businesses and sells them to customers.

The amount by which revenues exceed expenses.

The amount by which expenses exceed revenues.

A concept of accounting that requires accounting records and the data reported in financial statements to be based on objective evidence.

The owner's right to the assets of the business.

An unincorporated business form consisting of two or more persons conducting business as co-owners for profit.

Items such as supplies that will be used in the business in the future.

The field of accounting whereby accountants are employed by a business firm or a not-for-profit organization.

The difference between the amounts received from customers for goods or services provided and the amounts paid for the inputs used to provide the goods or services.

A business owned by one individual.

The field of accounting where accountants and their staff provide services on a fee basis.

Money received for rent.

Increases in owner's equity as a result of selling services or products to customers.

The total amount charged customers for merchandise sold, including cash sales and sales on account.

An agency of the U.

S. government that has authority over the accounting and financial disclosures for companies whose shares of ownership (stock) are traded and sold to the public.

A business providing services rather than products to customers.

A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.

A summary of the changes in owner's equity that have occurred during a specific period of time, such as a month or a year.

A concept of accounting requiring that economic data be recorded in dollars.

Stock issued to stockholders...owners

Distributions of earnings to stockholders. The payment of dividends decreases cash and stockholders' equity.

Ratio of Liabilities to Stockholders' Equity = Total Liabilities divided by Total Stockholders' Equity. The lower the number the better.

The stockholders' equity created from business operations through revenue and expense transactions.

A summary of the changes in retained earnings that have occurred during a specific period of time, such as a month or a year.

The rights of the owners for a corporation.