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| a comprehensive system for collecting, analyzing, and communicating financial information to a firm's owners and employees, to the public, and to various regulatory agencies |
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| recording of accounting transactions |
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| accounting information system (AIS) |
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| organized procedure for identifying, measuring, recording, and retraining financial information so that it can be used in accounting statements and management reports |
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| chief accounting officer; manages all of the firm's accounting activities |
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| field of accounting concerned with the external users (consumer groups, unions, stockholders, suppliers, creditors and government agencies) of a company's financial information |
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| field of accounting that serves the internal users of a company's financial information |
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| certified public accountants (CPA) |
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| accountant licensed by the state and offering services to the public |
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| systematic examination of a company's accounting system to determine whether its financial reports reliably represent its operations |
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| assistance provided by CPAs for tax preparation and tax planning |
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| core competencies for accounting |
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| combination of skills, technology, and knowledge that will be necessary for the future CPA |
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| salaried accountant hired by a business to carry out its day to day financial activities |
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| certified management accountant (CMA) |
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| professional designation awarded by the Institute of Management Accountants in recognition of management accounting qualifications |
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| Sarbanes-Oxley Act of 2002 |
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| enactment of federal regulations to restore public trust in accounting practices by imposing new requirements on financial activities in publicly traded corporations |
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| Accounting Equation Assets |
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| = Liabilities + Owners' Equity; used by accountants to balance data for firm's financial transactions at various points in the year |
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| any economic resource expected to benefit a firm or an individual who owns it |
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| debt owed by a firm to an outside organization or individual |
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| amount of money that owners would receive if they sold all of a firm's assets and paid all of its liabilities |
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| any of several types of reports summarizing a company's financial status to stakeholders and to aid in managerial decision making |
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| financial statement that supplies detailed information about a firm's assets, liabilities, and owner's equity |
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| asset that can be converted into cash within a year |
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| ease with which an asset can be converted into cash |
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| asset with long-term use or value, such as land, buildings, and equipment |
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| nonphysical asset, such as a patent or trademark, that has economic value in the form of expected benefit. |
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| debt that must be paid within one year |
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| debt that is not due for at least one year |
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| money that is invested in a company by its owners |
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| earnings retained by a firm for its use rather than paid out as dividends |
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| income statement (profit-and-loss statement) |
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| financial statement listing a firm's annual revenues and expenses so that a bottom line shows annual profit or loss |
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| funds that flow into a business from the sale of goods or services |
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| costs, other than the cost of revenues, incurred in producing a good or service |
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| profit-operating expenses |
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| gross profit-operatng expenses and income taxes |
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| detailed statement of estimated receipts and expenditures for a future period of time |
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| formal recording and reporting of revenues at the appropriate time |
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| guideline that the financial statements should not include just numbers but should also furnish management's interpretations and explanations of those numbers |
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| financial ratio, either short or long-term for estimating the borrower's ability to repay debt |
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| financial ratio for measuring a firm's potential earnings |
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| financial ratio for evaluating management's efficiency in using a firm's assets |
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| short-term solvency ratio |
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| financial ratio for measuring a company's ability to pay immediate debts |
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| financial ratio for measuring a company's ability to pay current debts out of current assets |
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| a company's total liabilities |
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| principle that invested money grows, over time, by earning interest or some other form of return |
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| the compounding of interest over time |
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| a portion of ownership of a corporation |
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| the most basic form of ownership, including voting rights on major issues, in a company |
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| current price of a share of stock in the market |
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| value of a common stock expressed as the firm's owners' equity divided by the number of common shares |
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| payment to shareholders, on a pershare basis, out of the company's earnings |
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| company that pools cash investments from individuals and organizations to purchase a portfolio of stocks, bonds, and other securities |
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well-established company with a sound financial history and a stable pattern of dividend payouts
ex. McDonalds |
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| a bundle of stocks or bonds that are in an index that tracks the overall movement of a market but unlike a mutual fund, can be traded like a stock |
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| stocks, bonds, and mutual funds representing secured, or asset-based claims by investors against issuers |
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| markets in which stocks and bonds are sold |
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| primary securities market |
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| market in which new stocks and bonds are brought and sold by firms and governments |
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| Security and exchange commission |
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| government agency that regulates U.S securities markets |
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| financial institution that specializes in issuing and reselling new securities |
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| a formal pledge obligating the issuer (the company) to pay interest periodically and repay the principal at maturity |
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| court-granted permission for a company to not pay some or all debts |
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| current price of share in the stock market |
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| value of a common stock expressed as total shareholder's equity divided by the number of shares of stock |
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| issued by a state or local government |
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| bond issued by the federal government |
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| planning, obtaining, and managing the company's funds in order to accomplish its objectives |
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| face value of a share of stock at the time it is originally issued (how much buyers are willing to pay for stocks book value |
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| security through which an issuer promises to pay the buyer a certain amount of money by a specified future date |
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| combined holdings of all the financial assets of any company or individual |
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| a debt owned by a firm to an outside organization or individual |
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| reports summarizing a company's financial status to stakeholder's and to aid in managerial decision making |
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| sheets that supply detailed information about accounting factors such as current assets, fixed assets, and intangible assets |
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| land, building, and equipment |
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| debts that must be paid in one year |
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| debt must be paid in a year or more |
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| money invested by owners; type of owner's equity |
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| net profits kept by a firm |
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| cost to produce a good/service |
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