Accounting -- the information system that measures business activities, processes that information into reports, and communicates the results to decision makers
financial statements -- documents that report on a business in monetary amounts, providing information to help people make informed business decisions
financial accounting -- a branch of accounting that focuses on information for people outside the firm
Management accounting -- the branch of accounting that focuses on information for internal decision-makers of a business
Certified Management Accountant (CMA) -- a licensed accountant who works for a single company
audit -- an examination of the Company's financial situation
corperation -- a business owned by stockholders; it begins when the state approves its articles of incorporation. A corporation is a legal entity, an "artificial person," in the eyes of the law
stockholder -- a person who owns stock in a corporation. Also called a shareholder.
Generally Accepted Accounting Principles (GAAP) -- accounting guidelines, formulated by the Financial Accounting Standards Board, that govern how accountants measure, process, and communicate financial information.
Entity -- an organization or a section of an organization that, for accounting purposes, stands apart from other organizations and individuals as a separate economic unit
accounting equation -- the basic tool of accounting, measuring the resources of the business and the claims to those resources: assets = liabilities + owners equity
asset -- and economic resource that is expected to be of benefit in future
liability -- and economic obligation payable to an individual or organization outside business
owners equity -- the claim of a business owner to the assets of the business. Also called capital
account receivable -- a promise to receive cash for customers to whom the business has sold goods were for whom the business has performed services
note receivable -- a written promise for future collection of cash
account payable -- a liability backed by the general reputation in credit standing of the debtor
note payable -- a written promise of future payment
revenue -- amounts earned by delivering goods or services to customers. Revenues increased owners equity
owner withdrawals -- amounts removed from the business by an owner
expense -- decrease in owners equity that occurs from using assets or increasing liabilities in the course of delivering goods or services to customers
transaction -- an event that affects the financial position of a particular entity and can be recorded reliably
balance sheet -- an entity's assets, liabilities, and owners equity as of a specific date. Also called the statement of financial position
net loss -- excess of total expenses and total revenues
income statement -- summary of an entity's revenues, expenses, and net income or net loss for a specific period. Also called the statement of earnings or the statement of operations
statement of owners equity -- summary of the changes in the entities in owners equity during a specific period
statement of Cash flows -- reports cash receipts and cash payments during a specific time frame
