Key state from chapter 1: Introducing accounting in service from gaue won Accounting, info for decision by man J. Wild. McGraw-Hill, 2005.

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Accounting
AB
Information and measurement system that identifies, records, and also communicates appropriate information around a company"s business activities.
Accounting EquationEquality including a company"s assets, liabilities, and equity: heritage = legal responsibility + Equity; likewise called balance sheet equation.
AssetsResources a business owns or controls that are expected to carry out current and also future services to the business.
AuditAnalysis and report of an organization"s audit system, its records, and also its reports using various tests.
Balance SheetFinancial statement that lists varieties and dollar quantities of assets, liabilities, and also equity at a specific date.
BookkeepingPart of accountancy that requires recording transactions and also events, one of two people manually or electronically; likewise called bookkeeping.
Business reality PrinciplePrinciple that calls for a service to be accounting for independently from its owner(s) and also from any kind of other entity
Common StockCorporation"s basic ownership share; also called funding stock.
Contributed CapitalTotal amount of cash and also other assets obtained from shareholder in exchange for stock; likewise called paid-in capital.
CorporationBusiness the is a separate legal reality under state or federal laws with owners dubbed shareholders or stockholders.
Cost PrincipleAccounting rule that calls for financial statement information to be based on actual costs incurred in organization transactions.
DividendsCorporation"s distribution of assets to its owners.
EquityOwner"s case on the heritage of a business; amounts to the residual interest in an entity"s assets ~ deducting liabilities; also called net assets.
EthicsCodes of conduct through which actions space judged as best or wrong, same or unfair, honest or dishonest.
EventsHappenings the both impact an organization"s financial position and can be reliably measured.
Expanded audit EquationAssets = legal responsibility + Equity where Equity equals .
ExpensesOutflows or utilizing up of assets as component of to work of a company to create sales.
External TransactionsExchanges of economic value in between one entity and also another entity.
External UsersPersons using accounting information who space not directly involved in to run the organization.
Financial AccountingArea of bookkeeping mainly aimed at serving outside users.
Financial audit Standards board (FASB)Independent team of permanent members responsible for setup accounting rules.
Generally Accepted accountancy Principles (GAAP)Rules that specify acceptable bookkeeping practices.
Going-Concern PrinciplePrinciple that needs financial statements come reflect the assumption that the business will continue operating.
IncomeAmount earned after subtracting all expenses necessary for and matched through sales because that a period; likewise called income, profit, or earnings.
Income StatementFinancial statement the subtracts prices from profits to productivity a net earnings or loss end a specified period of time; also includes any kind of gains or losses.
Internal TransactionsActivities within an company that can influence the accountancy equation.
Internal UsersPersons using audit information who room directly associated in regulating the organization.
International accounting Standards plank (IASB)Group that identifies preferred bookkeeping practices and also encourages an international acceptance; problems International gaue won Reporting requirements (IFRS).
LiabilitiesCreditors" insurance claims on an organization"s assets; involves a probable future payment of legacy or services that a agency is obligated to make as result of past transactions or events.
Managerial AccountingArea of accountancy mainly aimed at serving the decision-making requirements of inner users; also called management accounting.
Monetary Unit PrinciplePrinciple the assumes transactions and also events have the right to be expressed in money units.
Net AssetsOwner"s insurance claim on the assets of a business; amounts to the residual attention in one entity"s assets ~ deducting liabilities; also called net assets.
Net IncomeAmount earn after subtracting all costs necessary for and matched v sales for a period; additionally called income, profit, or earnings.
Net LossExcess of expenses over profits for a period.
Objectivity PrinciplePrinciple that prescribes independent, unbiased proof to assistance financial explain information.
PartnershipUnincorporated association of 2 or an ext persons to go after a company for profit as co-owners.
ProprietorshipBusiness owned by one human that is not arranged as a corporation; additionally called proprietorship.
RecordkeepingPart of accounting that entails recording transactions and also events, one of two people manually or electronically; likewise called bookkeeping.
Retained EarningsCumulative revenue less cumulative losses and also dividends.
ReturnMonies got from an investment; frequently in percent form.
Return top top AssetsRatio reflecting operating efficiency; identified as network income divided by average complete assets; additionally called return on heritage or return ~ above investment.
RevenuesGross rise in equity from a company"s business activities that earn income; likewise called sales.
Revenue acknowledgment PrincipleThe rule prescribing that revenue is recognized when earned.
RiskUncertainty about an meant return.
Securities and also Exchange commission (SEC)Federal firm Congress has charged to set reporting rules for establishments that market ownership share to the public.
ShareholdersOwners of a corporation; also called stockholders.
SharesEquity the a corporation split into units; also called stock.
Sole ProprietorshipBusiness own by one human that is not arranged as a corporation; additionally called proprietorship.
Statement that Cash FlowsA financial statement that lists cash inflows (receipts) and cash outflows (payments) throughout a period; i ordered it by operating, investing, and also financing.
Statement of preserved EarningsReport of transforms in retained income over a period; readjusted for rises (net income), because that decreases (dividends and net loss), and for any type of prior duration adjustments.
StockEquity that a corporation split into units; also called stock.

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StockholdersOwners that a corporation; likewise called stockholders.
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