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Definition
| a system of maintaining records of a company's operations & communicating that information to decision makers |
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| are to measure business activities of a company & to communicate those measurements to external parties for decision-making purposes |
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| make decisions related to lending money to the company |
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| transactions involving external sources of funding (2 basics fundings-creditors & Owners) |
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| includes purchases & sales of (1) long-term resources like land, buildings, equipment, & machinery and (2) any resources not directly related to a company's normal operations |
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| includes transactions that relate to the primary operations of the company like utilities, taxes, advertising, wages, rent and maintenance |
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| an entity that is legally separate from its owners (sells stocks of the company) |
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| resources owned by a company (cash, inventories, supplies, buildings) |
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| amounts owed to creditors |
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| owners claims to resources |
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| Assets = Liabilities + Stockholders equity |
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| are the amounts earned from selling products or services to customers |
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| are the costs of providing products and services |
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| the difference(whats left over) between revenues and expenses |
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| When the difference between revenue and expenses is negative |
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| payments made to stockholders |
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| a business owned by one person |
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| a business owned by two or more persons |
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| periodic reports published by the company for the purpose of providing information to external users |
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| a financial statement that reports the companys revenues & expenses over an interval of time |
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| represents the cumulative amount of net income, earned over the life of the company, that has not been distributed to stockholders as dividends |
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| a financial statement that presents the financial position of the company on a particular date |
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| a financial statement that measures activities involving cash receipts & cash payments over an interval of time |
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| Management Discussion & Analysis (MD&A) |
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| section typically includes management views on significant events, trends & uncertainties pertaining to the companys operations and resources |
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| Financial Accounting Standards Board (FASB) |
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| an independent private-sector body with full time voting members & a very large support staff |
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| International Accounting Standards (IASB) |
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| a accounting profession that has undertaken a project whose goal is to eliminate differences in accounting standards around the world |
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| Securities & Exchange Commission (SEC) |
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Definition
| the 1934 act that requires companies that publicly trade their stock to prepare periodic financial statements for distribution to investors & creditors |
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| someone hired by a company as an independent party to express a professional opinion of the accuracy of that companys financial statements |
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| provides for the regulation of auditors & the types of services they furnish to clients, increases accountability of corporate executives, addresses conflicts of interest for securities analysts, and provides for stiff criminal penalties for violators |
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| professional service firms that traditionally have focused on three ares; auditing, tax preparation/planning, & business consulting |
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| means providing accounting services to the company that employs you |
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