Key Terms: Chapter One
A set of concepts and techniques that are used to measure and report financial information about an economic unit.
A financial relationship at the heart of the accounting model: Assets = Liabilities + Owners' Equity
The economic resources owned by an entity; entailing probable future benefits to the entity
The examination of transactions and systems that underlie an organization's financial statements with the goal or reporting thereon
A financial statement that presents a firm's assets, liabilities, and owners' equity at a particular point in time
certified public accountant (CPA)
An individual who is licensed by a state to practice public accounting
A form of business organization where ownership is represented by divisible units called shares of stock
Amounts paid from profits of a corporation to shareholders as a return on their investment in the stock of the entity
The costs incurred in producing revenues
An area of accounting that deals with external reporting to parties outside the firm; usually based on standardized rules an procedures
financial accounting standards board
An organization charged with producing standards for financial reporting in the USA (FASB)
Core financial reports that are prepared to represent the financial position and results of operations of a company
The concept that many transactions and events are to be measured and reported at acquisition cost
A financial statement that summarizes the revenues, expenses, and results of operations for a specified period of time
A person within an organization who reviews and monitors the controls, procedures, and information of the organization
Amounts owed by an entity to others
An area of accounting concerned with reporting results to managers and others who are internal to an organization
The excess of revenues over expenses for a designated period of time
The excess of expenses over revenues for a designated period of time
Resources provided to an organization by a person in exchange for a position of ownership in the organization
The residual of assets minus liabilities, representing the collective interest or position of the entity's owners
A non-corporation representing an association of two or more persons organized to carry out a business plan for a profit motive
Accounting activities provided by a person to the general public, typically relating to audit, tax and similar services
The excess of a corporation's income over its dividends
Inflows and other benefits received in exchange for the providing of goods and services
A non-corporation business owned by a sole individual
statement of retained earnings
A financial statement that discloses changes in retained earnings during a designated period of time; those changes usually attributable to income and dividends