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4.01 Nature of Acc.
Objective 4.01 Part 2
| Term | Definition |
|---|---|
| Accountant | An individual who has had specialized training in accounting procedures |
| Accounting | The process of keeping finical records |
| accounting cycle | a process or series of steps that businesses complete to maintain their financial records effectively |
| accounting standards | rules that accountants must follow when preparing financial statements |
| accounting system | the methods and procedures used in consistently handling the business's financial information |
| acquisition of funds | finance activity involving making decisions about financing |
| administration of assets | finance activity involving making decisions about a firm's investments |
| accrual accounting method | a method of accounting that records transactions at the time they occur even if no money changes hands at the time |
| assets | anything of value that a business owns |
| balance sheet | a financial statement that captures the financial condition of the business at that particular moment |
| book keeping | the steps of accounting cycle that involve recording each business transaction; the process of analyzing financial transactions, journalizing transactions, posting ledgers, and balancing the books |
| cash | currency and coins |
| cash accounting method | an accounting method in which income and expenditures are recorded at the time the money changes hands |
| cash flow statement | a financial summary with estimates as to when, where, and how much money will flow into and out of a business |
| capital investment decisions | decisions that determine which projects a business will invest in, how investments will be financed and whether to pay dividends to shareholders. |
| credit | the arrangement by which business or individuals ca purchase now and pay later |
| expenditures | the monies that a business spends also called expenses |
| expenses | the monies that a business spends also called expenditures |
| finance | in business the function that involves all money and money management matters |
| financial accounting | a type of accounting that involves preparing and reporting financial data to external users who are not directly involved in business operations |
| financial statement | a summary of accounting information |
| income | money received by a business or an individual from outside sources |
| income statement | a financial summary that shows how much money the business has made or lost also called the profit and loss statement |
| investors | those who invest their funds in a business may be owners or stockholders |
| journal | a special book or computer program in which a business's transactions are recorded in the order which they occur |
| ledger | the accounting record for a specific department or area of the business |
| liabilities | debt's that the business owes |
| managerial accounting | a type of accounting that involves preparing and reporting financial data to internal users, usually managers who need financial information to control day to day operations and to make financial decisions and plans affecting the business |
| net worth | the total value of the business |
| owners equity | the amount an owner has invested in the business plus or minus profits and losses |
| transaction | a business activity such as a sale, purchase, or return |
| trial balance | the listing of a business's different accounts and their current balances used to check the accuracy of journal and ledger entries |
Created by:
graci.b199
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