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4.01 Accounting
Objective 4.01 Part 2
| Term | Definition |
|---|---|
| Accountant | An individual who has had specialized training in accounting procedures |
| Accounting | The process of keeping financial 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 businesses financial information |
| Acquisition of Funds | Finance activity involving making decisions about financing |
| Administration of Assets | Finance activity involving making decisions about firms 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 |
| Bookkeeping | The steps of the accounting cycle that involve recording each business transaction; the process of analyzing financial transactions, journalizing transactions, posting to 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 the investments will be financed, and whether to pay dividends to shareholders |
| Credit | The arrangement by which 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 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 | Debts 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 or losses |
| Transactions | A business activity such as a sale, a purchase, or a 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 |
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