Key state from chapter 1: Introducing audit in business from financial Accounting, details for decisions by john J. Wild. McGraw-Hill, 2005.
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| AB | |
| Information and also measurement system that identifies, records, and communicates pertinent information around a company"s company activities. | |
| Accounting Equation | Equality involving a company"s assets, liabilities, and equity: assets = liabilities + Equity; also called balance paper equation. |
| Assets | Resources a organization owns or controls that are expected to administer current and also future services to the business. |
| Audit | Analysis and report of one organization"s bookkeeping system, that records, and also its reports using assorted tests. |
| Balance Sheet | Financial statement the lists species and dollar quantities of assets, liabilities, and also equity at a particular date. |
| Bookkeeping | Part of accounting that involves recording transactions and also events, one of two people manually or electronically; likewise called bookkeeping. |
| Business entity Principle | Principle that needs a company to be accounting for separately from that is owner(s) and from any other entity |
| Common Stock | Corporation"s an easy ownership share; also called resources stock. |
| Contributed Capital | Total amount of cash and other assets obtained from shareholder in exchange for stock; additionally called paid-in capital. |
| Corporation | Business that is a separate legal reality under state or federal legislations with owners referred to as shareholders or stockholders. |
| Cost Principle | Accounting principle that calls for financial statement details to be based on actual prices incurred in organization transactions. |
| Dividends | Corporation"s distribution of assets come its owners. |
| Equity | Owner"s claim on the assets of a business; equates to the residual attention in one entity"s assets ~ deducting liabilities; additionally called net assets. |
| Ethics | Codes that conduct by which actions are judged as right or wrong, same or unfair, moral or dishonest. |
| Events | Happenings that both affect an organization"s gaue won position and can be reliably measured. |
| Expanded accounting Equation | Assets = liabilities + Equity wherein Equity amounts to |
| Expenses | Outflows or using up of heritage as part of to work of a business to create sales. |
| External Transactions | Exchanges of financial value in between one entity and also another entity. |
| External Users | Persons using accounting information who are not directly associated in to run the organization. |
| Financial Accounting | Area of bookkeeping mainly aimed in ~ serving external users. |
| Financial accounting Standards board (FASB) | Independent team of permanent members responsible for setting accounting rules. |
| Generally Accepted accounting Principles (GAAP) | Rules that specify acceptable accounting practices. |
| Going-Concern Principle | Principle that needs financial statements to reflect the presumption that the service will continue operating. |
| Income | Amount deserve after subtracting all costs necessary for and matched with sales for a period; likewise called income, profit, or earnings. |
| Income Statement | Financial statement the subtracts costs from earnings to yield a net income or loss over a specified duration of time; additionally includes any kind of gains or losses. |
| Internal Transactions | Activities within an company that can impact the accounting equation. |
| Internal Users | Persons using accounting information who space directly connected in regulating the organization. |
| International audit Standards plank (IASB) | Group the identifies preferred bookkeeping practices and encourages an international acceptance; worries International financial Reporting criter (IFRS). |
| Liabilities | Creditors" claims on one organization"s assets; requires a probable future payment of heritage or solutions that a agency is obligated to make due to past transactions or events. |
| Managerial Accounting | Area of accountancy mainly aimed at serving the decision-making demands of inner users; likewise called management accounting. |
| Monetary Unit Principle | Principle the assumes transactions and events deserve to be expressed in money units. |
| Net Assets | Owner"s claim on the assets of a business; amounts to the residual interest in an entity"s assets after deducting liabilities; also called network assets. |
| Net Income | Amount earned after subtracting all expenses necessary for and matched with sales because that a period; likewise called income, profit, or earnings. |
| Net Loss | Excess of prices over revenues for a period. |
| Objectivity Principle | Principle that prescribes independent, unbiased evidence to support financial explain information. |
| Partnership | Unincorporated association of two or more persons to pursue a organization for profit as co-owners. |
| Proprietorship | Business own by one person that is not organized as a corporation; likewise called proprietorship. |
| Recordkeeping | Part of accounting that entails recording transactions and events, either manually or electronically; additionally called bookkeeping. |
| Retained Earnings | Cumulative earnings less accumulation losses and also dividends. |
| Return | Monies received from an investment; frequently in percent form. |
| Return ~ above Assets | Ratio reflecting operating efficiency; identified as net income divided by average total assets; also called return on assets or return ~ above investment. |
| Revenues | Gross rise in same from a company"s business tasks that earn income; likewise called sales. |
| Revenue recognition Principle | The rule prescribing that revenue is well-known when earned. |
| Risk | Uncertainty around an supposed return. |
| Securities and also Exchange the supervisory board (SEC) | Federal firm Congress has actually charged to collection reporting rules for organizations that offer ownership share to the public. |
| Shareholders | Owners the a corporation; likewise called stockholders. |
| Shares | Equity that a corporation split into units; likewise called stock. |
| Sole Proprietorship | Business owned by one person that is not arranged as a corporation; likewise called proprietorship. |
| Statement the Cash Flows | A jae won statement that lists cash inflows (receipts) and also cash outflows (payments) during a period; arranged by operating, investing, and also financing. |
| Statement of kept Earnings | Report of changes in retained income over a period; readjusted for rises (net income), because that decreases (dividends and also net loss), and also for any prior period adjustments. |
| Stock | Equity of a corporation divided into units; likewise called stock. See more: What Is An Apostle Higher Than A Pastor ? Apostles, Prophets, Evangelists, And Pastor |
| Stockholders | Owners the a corporation; additionally called stockholders. |
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