| A | B |
|---|
| Accounting | an information and measurement system that identifies, records, and communicates relevant information about a company's business activities |
| Accounting Equation | Assets = Liabilities + Equity |
| Assets | resources expected to produce current and future benefits |
| Audit | an analysis and report of an organization's accounting system and its records using various tests |
| Bonds | written promises to repay amounts loaned with interest |
| Bookkeeping | part of accounting that involves recording transactions and events, either electronically or manually (also called recordkeeping) |
| Business | one or more individuals selling products and/or services for profit |
| Common stock | a corporation's basic ownership share (also called capital stock) |
| Corporation | a business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders |
| Ethics | codes of conduct by which actions are judged as right or wrong, fair or unfair, honest or dishonest |
| Expenses | the costs incurred to earn sales |
| External users | persons using accounting information who are not directly involved in running the organization |
| Financial Accounting Standards Board (FASB) | Independent group of seven full-time members who are responsible for setting accounting rules |
| Financial accounting | area of accounting aimed at serving external users |
| Financial activities | means organizations use to pay for their resources such as land, buildings, and machinery |
| Generally Accepted Accounting Principles (GAAP) | Rules that specify acceptable accounting practice |
| Information age | a time period that emphasizes communication, data, news, facts, access and commentary |
| Internal users | persons using accounting information who are directly involved in managing the organization |
| Investing activities | the buying and selling of resources that an organization controls |
| Liabilities | creditors' claims on an organization's assets |
| Loss | this arises when expenses are more than sales |
| Managerial accounting | area of accounting aimed at serving the decision-making needs of internal users |
| Net income | amount earned after subtracting all expenses necessary for sales (also called income, profit or earnings) |
| Operating activities | use of assets to carry out an organization's plans in the areas of research, development, purchasing, production, distribution and marketing. |
| Owner's equity | owner's claim on an organization's assets (also called equity) |
| Partnership | a business owned by two or more people that is not organized as a corporation |
| Planning | term for an organization's ideas, goals and strategic actions |
| Private accounting | accounting services provided for an employer other than the government |
| Public accounting | accounting services provided to many different clients |
| Recordkeeping | part of accounting that involves recording transactions and events, either electronically or manually (also called bookkeeping) |
| Return | the income from an investment |
| Return on investment | a ratio serving as an indicator of operating efficiency; defined as net income divided by average total assets |
| Revenues | amounts earned from selling products or services (also called sales) |
| Risk | the amount of uncertainty about an expected return |
| Sales | amounts earned from selling products or services (also called revenues) |
| Securities and Exchange Commission (SEC) | Federal agency charged by Congress to set reporting rules for organizations that sell ownership shares to the public |
| Shareholders | owners of a corporation (also called stockholders) |
| Shares | equity of a corporation divided into units |
| Social responsibility | being accountable for the impact one's actions might have on society |
| Sole proprietorship | business owned by one person that is not organized as a corporation (also called proprietorship) |
