| A | B |
|---|
| 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. |
| Accrual | A method of accounting that records transactions at the time they occur. |
| Acquisition of funds | Finance activity involving making decisions about financing. |
| Administration of assets | Finance activity involving making decisions about a firm’s investments. |
| 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. |
| Capital investment decisions | Decisions that determine which projects a business will invest in, how the investment(s) will be financed, and whether to pay dividends to shareholders. |
| Cash flow statement | A financial summary of recording as to when, where, and how much money will flow into and out of a business. |
| Dividends | A sum of money paid to an investor or stockholder as earnings on an investment. |
| Expenses | The monies that a business spends; also called expenditures. |
| External users | People outside the business who use accounting information – suppliers, banks, customers, lenders, investors, and tax authorities. |
| Finance | In business, the function that involves all money and money management matters. |
| 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 has lost; also called the profit-and-loss statement. |
| Internal users | People within the business who use financial information – owners, managers, and employees. |
| Liabilities | Debts that the business owes. |
| Net worth | The total value of the business. |
| Owner’s equity | The amount an owner has invested in the business plus or minus profits and losses. |
| Statement of owner’s equity | Usually a one-page report showing the difference in total assets and total liabilities, shows the overall value of the owner’s equity. |
