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4.01 nature of acc
objective 4.01 nature of accounting
| Term | Definition |
|---|---|
| accountant | an individual who has had specialized training in accounting procedures |
| accounting | the process of keeping financial records |
| accounting standard's | rules that accountant's must follow when preparing financial statements |
| accounting system | the methods and procedures used in consistently handling the business financial information |
| acquisition of funds | finance activity involving making decisions about financing |
| administration of assets | finance activity involving making decisions about a firms investment's |
| 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 |
| bookkeeping | the steps of the accounting cycle that involve recording each business transaction the process of analyzing financial transactions journalizing transactions posting to legers 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 |
| capital investment decisions | decisions that determine which projects a business will invest in how the investment will be financed and whether to pay dividends to shareholders |
| credit | the arrangement by which businesses or businesses or individuals can 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 revived by a business or an individual from outside sources |
| income statement | a financial summary that shows how much money the business has made or has lost also called the profit and loss statement |
| investors | those who invest their funds in a business may be owners or stockholders |
| journal | special book or computer program in which a business transactions are recorded in the order in which they occur |
| ledger | the accounting record for a specific department of area of the business |
| liabilities | debts that business owes |
| managerial accounting | a type of accounting that involves preparing and reporting financial data to internal users usually mangers who need financial information to control day to day operations and to make financial decisions and plans affecting the business |
| net worth | the amount of 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 a purchase or a return |
| trial balance | the listing of a business different accounts and their current balances used to check the accuracy of journal and leger entries |
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