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59 Cards in this Set
- Front
- Back
- 3rd side (hint)
Accounting |
A system that collects and processes financial information about an organization and reports that information to decision makers |
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Unit of measure |
Measurement of information about a business in the monetary unit (dollars or other national currency) |
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Partnership |
A unincorporated business owned by two or more people |
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Private company |
A company that sells shares or its stock privately and is not required to release its financial statements to the public |
Publix Company |
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Corporation |
A incorporated business that’s issues shared of stock as evidence of owner ship |
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Investing Activities |
Buying and selling productive resources with long lives |
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Financing Activities |
Transactions with lenders and stock holders |
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Operating activities |
Activities directly related to running the business to earn profit |
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SEC |
Securities and exchange commission |
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FASB |
Financial Accounting Standards Board |
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Public Company |
A company that has its stock bought and sold on stock exchanges and it is required to publicly release its financial statements |
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GAAP |
Generally accepted accounting principles |
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Separate enitiy |
The financial reports of a business are assumed to include the results of only that businesss activities |
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Assets |
The recourses owned by a company |
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Faithful Representation |
Financial information that depicts the economic substance of business activities |
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Stockholders Equity |
The total amount invested and reinvested in the business by the owners |
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Expenses |
The cost of business necessary to earn revenues |
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Relevance |
A feature of financial information that allows it to influence a decision |
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Revenues |
Earned by selling gold or services to customers |
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Liabilities |
The amounts owed by the business |
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HAM |
Human recourse Assets Money |
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Cost |
Cash going out |
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Loss |
Cost and you get no benifit |
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Financial statements |
Reports that summarize the financial results of business activities |
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Creditors |
Suppliers, banks, and anyone to whom money is owed |
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Directors |
Short term for a company’s board of directors |
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Basic Accounting Equation |
Assets= liabilities + stockholders equity |
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Separate entity assumption |
States that businesses transactions are separate from and should exclude the personal transactions. If the owner |
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Statement of Retained Earnings |
Reports the way that net income and the distribution of dividends affect the financial position of the company during the accounting period |
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Balance Sheet |
Reports the amount of assets, liabilities and stockholders equity of an accounting entity at a point in time |
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Statement of cash flow |
Reports inflows and outflows of cash during the accounting period in the categories of operating, investing, and financing |
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International Financial Reporting Standards (IFRS) |
The rules used internationally to calculate and report financial information in the financial statements |
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Sarbanes- Oxley Act (SOX) |
A set of laws established to strengthen corporate reporting in the US |
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Ethics |
The standards of conduct for judging right from wrong |
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Cost Principle |
When you acquire an assets you write in the book your amount |
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Financing |
Getting money to buy something |
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Equity financing |
From sale of stock |
Only corporations can do this |
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Debt |
Loans |
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Sale debt |
Bonds |
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Self financing |
Paying from cash the business has |
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Investing |
Buying long term assets |
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Transaction |
Exchange for value to value |
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External Transactions |
Between company and customers, suppliers, and employers |
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Internal |
Value or worth has changed |
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Account Classification |
Why you spent the money |
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Source documents |
Supper the cost principle and everything is verifiable |
Receipts |
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Chart of accounts |
List of accounts to the business |
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Liquidity |
How fast can you turn assess into cash |
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Journal |
A record of each days transactions |
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Ledger |
A collection of records that summarizes for each account the effect of transactions entered into the journal |
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Debit |
Left side of t-account |
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Credit |
Right side of t account (money going out) |
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Journal entry |
An accounting methods for expressing the effects of a transaction in a debits-equal-credit format |
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T- Account |
Money coming and out in balance |
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Trail balance |
A list of all accounts with their balances to provide a check on the equality of the debuts and credits |
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Classified balance sheet |
A balance sheet that classified assets and liabilities into current and other ( long term ) categories |
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Current assets |
Assets that will be used up or turn into cash with 12 Months of the best operating cycle whichever is longer |
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Current liabilities |
Short term obligations that will be paid in cash (or fulfilled with other current assets) within 12 months of the operating cycle whichever is longer |
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Non current |
Long term assets and liabilit that do meet the definition of current |
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