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ACCOUNTING
The
information
system
that
KIESO
identifies,
records,
and
communicates the economic events
of an organization to interested
users. (p. 4).
p. 6 Information system designed to PATRICA
capture
and
communicate
a
businesss financial condition and
financial performance to decision
makers inside and outside the
organization.
An
information
system
that NEEDLE
measures,
processes,
and
S
communicates financial information
about an economic entity. (LO1)
Information
and
measurement
WILD
system that identifies, records, and
communicates relevant information
about
a
companys
business
activities. (p. 4)
The
information
system
that HORNGR
EN
measures
business
activities,
processes that information into
reports, and communicates the
results to decision makers.
An information system that provides WARREN
reports to stakeholders about the
economic activities and condition of
a business. (7)
Service- based profession that EDMON
provides
reliable
and
relevant
D
financial
information
useful
in
making decisions. p. 2
A system of gathering financial COLLEG
information about a business and
E
reporting this information to users.
A system for providing quantitative, ALBREC
financial
information
about
HT
ANALYZING (5)
PROCESSING
(34)
CLASSIFYING
(5)
RECORDING
(5)
SUMMARIZING
(5)
REPORTING (5)
INTERPRETING
(5)
COLLEGE
(8)
COLLEGE
(8)
COLLEGE
(8)
COLLEGE
(8)
COLLEGE
(8)
COLLEGE
(8)
COLLEGE
(8)
KIESO
NEEDLE
S
WILD
RECORDKEEPI
NG (P. 4)
BOOKKEEPER
(8)
ACCOUNTANT
(8)
ACCOUNTING
CLERK (8)
PARAACCOUNTANT
(8)
CONTROLLER
(10)
ACCOUNTING
SYSTEM
ACCOUNTING
INFORMATION
SYSTEMS (10)
INPUT (34)
ALBREC
HT
WILD(4)
COLLEG
E
COLLEGE
(8)
COLLEGE
(8)
COLLEGE
(8)
COLLEGE
(8)
ALBRECH
T(9)
COLLEGE
(8)
COLLEGE
OUTPUT (34)
PRIVATE
ACCOUNTING
PUBLIC
ACCOUNTING
CERTIFIED
PUBLIC
ACCOUNTANT
(8)
necessary input for the accounting
information system.
The financial statements are the COLLEGE
(8)
output
of
the
accounting
information system.
PATRICA
WARREN
PATRICA
WARREN
PATRICA
NEEDLE
S
HORNGR
EN
WARREN
COLLEG
E
ALBREC
HT
COLLEGE
(8)
COLLEGE
(8)
COLLEGE
(8)
WARREN
(6)
HORNGREN(
5)
FINANCIAL
ACCOUNTING
COST
ACCOUNTING
(10)
FORENSIC
ACCOUNTING
(9)
managers. (LO1)
The field of accounting that provides
economic and financial information
for investors, creditors, and other
external users. (p. 7).
p. 766 Area of accounting that
prepares
information
used
by
external parties, such as investors,
creditors, and regulators.
The process of generating and
communicating
accounting
information in the form of financial
statements to those outside the
organization. (LO1)
Area of accounting aimed mainly at
serving external users. (p. 5)
The branch of accounting that
focuses on information for people
outside the firm.
The branch of accounting that is
concerned
with
recording
transactions
using
generally
accepted
accounting
principles
(GAAP) for a business or other
economic unit and with a periodic
preparation of various statements
from such records. (8, 794)
Includes preparing various reports
and
financial
statements
and
analyzing operating, investing, and
financing decisions.
Determining the cost of producing
specific
products
or
providing
services and analyzing for cost
effectiveness.
A specialized field that combines
fraud detection, fraud prevention,
litigation support, expert witnessing,
business valuations, and other
KIESO
PATRICA
NEEDLE
S
WILD
HORNGR
EN
WARREN
COLLEG
E
COLLEGE
(8)
COLLEGE
(8)
TAX
ACCOUNTING
(10)
TAXATION (9)
MANAGERIAL
ACCOUNTING
(P. 2)
investigative activities.
Services focused on tax planning, COLLEGE
(8)
preparing tax returns, and dealing
with the Internal Revenue Service
and other governmental agencies.
COLLEGE
See tax accounting.
(8)
HORNGREN(
5)
AUDITING (9)
AUDITORS (P.
13)
AUDIT
COMMITTEE
INTERNAL
AUDITING (10)
HORNGREN(
5)
COLLEGE
(8)
WILD(4)
NEEDLES
ALBRECH
T(9)
COLLEGE
(8)
INTERNAL
AUDITORS
EXTERNAL
AUDITORS
ALBRECH
T(9)
ALBRECH
T(9)
CODE OF
PROFESSIONAL
CONDUCT
INTERNAL
CONTROLS
CORPORATE
GOVERNANCE
DUE CARE
PROFESSIONAL
ETHICS
FIDUCIARY
RESPONSIBILIT
Y (P. 7)
RATIONALIZATI
ON 67
PRESSURE 67
GENERALLY
ACCEPTED
PATRICA
EDMOND
(7)
NEEDLE
S
NEEDLE
S
NEEDLE
S
HORNGREN(
5)
EDMOND
(7)
EDMOND
(7)
KIESO
ACCOUNTING
PRINCIPLES
(GAAP)
GAAP OVAL
GENERALLY
9).
p. 23 Accounting measurement and PATRICA
reporting rules to be applied by
businesses.
The
conventions,
rules,
and NEEDLES
procedures that define accepted
accounting practice at a particular
time. (LO7)
Authoritative guidelines that define ALBRECH
T(9)
accounting practice at a particular
time.
Generally accepted guidelines for WARREN
(6)
the
preparation
of
financial
statements. (10)
Procedures
and
guidelines COLLEGE
(8)
developed
by
the
Financial
Accounting Standards Board to be
followed in the accounting and
reporting process.
Accounting guidelines, formulated HORNGREN(
5)
by
the
Financial
Accounting
Standards Board, that govern how
accountants measure, process, and
communicate financial information.
Rules
that
specify
acceptable WILD(4)
accounting practices. (p. 8)
Rules
and
regulations
that EDMOND
(7)
accountants agree to follow when
preparing financial reports for public
distribution. p. 5
A diagram that represents the ALBRECH
T(9)
flexibility a manager has, within
GAAP, to report one earnings
number
from
among
many
possibilities based on different
methods and assumptions.
Auditing standards developed by
ALBRECH
ACCEPTED
AUDITING
STANDARDS
(GAAS)
FINANCIAL
ACCOUNTING
STANDARDS
BOARD (FASB)
A
private
organization
that [KIESO]
establishes
generally
accepted
accounting principles (GAAP). (p. 9).
p. 23 Entity with the primary [PATRIC
responsibility (as designated by the
A]
Securities
and
Exchange
Commission) of setting underlying
rules of accounting in the United
States.
The most important body for [NEEDLE
developing rules on accounting
S]
practice; it issues Statements of
Financial Accounting Standards.
(LO7)
Field of accounting designed to EDMOND
(7)
meet the information needs of
external
users
of
business
information (creditors, investors,
governmental agencies, financial
analysts, etc.); its objective is to
classify and record business events
and transactions to facilitate the
production of external financial
reports (income statement, balance
sheet, statement of cash fl ows, and
statement of changes in equity). p.
363
The private organization responsible ALBRECH
T(9)
for establishing the standards for
financial accounting and reporting in
the United States.
The authoritative body that has the WARREN
(6)
primary responsibility for developing
T(9)
DISCUSSION
MEMORANDU
M (5)
EXPOSURE
DRAFT (6)
STATEMENT
OF FINANCIAL
ACCOUNTING
STANDARDS
(SFAS) (6)
SECURITIES
AND
EXCHANGE
COMMISSION
(SEC)
A
governmental
agency
that
KIESO
oversees U.S. financial markets and
accounting standard-setting bodies.
(p. 9).
p. 23 Governmental agency that PATRICA
supervises the work of the Financial
Accounting Standards Board and the
Public
Company
Accounting
Oversight Board.
A
governmental
agency
that NEEDLE
regulates the issuing, buying, and
S
selling of stocks. It has the legal
power to set and enforce accounting
ALBRECH
T(9)
ALBRECH
T(9)
WILD(4)
An
accounting
standard-setting
KIESO
body that issues standards adopted
by many countries outside of the
United States. (p. 9).
An organization that encourages NEEDLES
worldwide
cooperation
in
the
development
of
accounting
principles. (LO7)
The committee formed in 1973 to ALBRECH
T(9)
develop
worldwide
accounting
standards.
Group that identifies preferred WILD(4)
accounting
practices
and
encourages
global
acceptance;
issues
International
Financial
Reporting Standards (IFRS). (p. 9)
The organization that determines HORNGREN(
5)
how
accounting
is
practiced
internationally.
INTERNATION
AL FINANCIAL
REPORTING
STANDARDS
(IFRS) (P. 4)
SARBANESOXLEY ACT OF
2002 (SOX)
HORNGREN(
5)
WILD(4)
FOREIGN
CORRUPT
PRACTICES
ACT (FCPA)
ALBRECH
T(9)
Public
Company
Accounting
Oversight
Board
(PCAOB)
American
Institute of
Certified
Public
Accountants
(AICPA)
Institute of
Management
Accountants
(IMA)
Governmental
Accounting
Standards
NEEDLE
S
Board (GASB)
Internal
Revenue
Service (IRS)
ACCOUNTING
MODEL
NEEDLE
S
ALBRECH
T(9)
ALBRECH
T(9)
KIESO
KIESO
PATRICA
PATRICA
PATRICA
PATRICA
FAITHFUL
REPRESENTATI
ON
COST
PRINCIPLE
FAIR VALUE
PRINCIPLE
MONETARY
UNIT
ASSUMPTION
SEPARATE
ENTITY
ASSUMPTION
ECONOMIC
ENTITY
ASSUMPTION
BUSINESS
ENTITY (20)
BUSINESS
ENTITY
ASSUMPTION
(P. 11)
BUSINESS
ENTITY
CONCEPT (11)
COST
COST
CONCEPT (11)
CONSERVATIS
M 51
EXPENSE
NEEDLE
S
KIESO
COLLEGE
(8)
WILD(4)
WARREN
(6)
COLLEGE
(8)
EDMOND
(7)
WARREN
(6)
EDMOND
(7)
WILD(4)
RECOGNITION
PRINCIPLE (P.
11)
FISCAL YEAR
(25)
ACCOUNTING
PERIOD
ACCOUNTING
PERIOD
CONCEPT (25)
TIME PERIOD
ASSUMPTION
(P. 11)
FAITHFUL
REPRESENTATI
ON PRINCIPLE
(P. 10)
FULL
DISCLOSURE
PRINCIPLE (P.
11)
GOING
CONCERN
ASSUMPTION
GOINGCONCERN
CONCEPT (P.
10)
HISTORICAL
COST
HISTORICAL
COST
CONCEPT 13
UNIT OF
MEASURE
CONCEPT (11)
STABLE
MONETARY
UNIT CONCEPT
(P. 11)
SEPARATE
ENTITY
CONCEPT
REVENUE
RECOGNITION
PRINCIPLE (P.
10)
RELIABILITY
CONCEPT 13
OBJECTIVITY
CONCEPT (11)
MEASUREMEN
T PRINCIPLE
(P. 10)
WARREN
(6)
HORNGREN(
5)
ALBRECH
T(9)
WILD(4)
MONETARY
MEASUREMEN
T
MATCHING
CONCEPT (18)
MATCHING
PRINCIPLE (P.
11)
ENTITY
BUSINESS
ALBRECH
T(9)
WARREN
(6)
WARREN
(6)
KIESO
LIMITEDLIABILITY
PARTNERSHIP
(P. 6)
MUTUAL
AGENCY (P. 6)
11).
p. 506 An unincorporated business PATRICA
owned by two or more individuals.
A business that is owned by two or NEEDLES
more people and that is not
incorporated. (LO4)
An unincorporated business form WARREN
(6)
consisting of two or more persons
conducting business as co- owners
for profit. (3, 527)
A type of ownership structure in COLLEGE
(8)
which more than one person owns
the business.
Unincorporated association of two WILD(4)
or more persons to pursue a
business for profit as co- owners.
(pp. 11 & 480)
A business with two or more owners HORNGREN(
5)
and not organized as a corporation.
Company in which each partner is HORNGREN(
5)
only liable for his or her own actions
or those under his or her control.
The ability of partners in a
partnership
to
commit
other
partners and the business to a
contract.
HORNGREN(
5)
AUTHORIZATI
ON (P. 7)
ARTICLES OF
INCORPORATI
ON (P. 6)
CHARTER (P.
6)
SHARES (P.
12)
STOCK (P. 12)
STOCKHOLDE
R (P. 6)
shareholder.
Owners of a corporation; also called
stockholders. (p. 12)
The owners of a corporation.
SHAREHOLDE
R (P. 6)
LIMITED
LIABILITY
COMPANY
(LLC) (4)
NONPROFIT
ORGANIZATIO
N
MANUFACTURI
NG BUSINESS
(3)
WILD(4)
ALBRECH
T(9)
EDMOND
(7)
HORNGREN(
5)
ALBRECH
T(9)
WILD(4)
WARREN
(6)
HORNGREN(
5)
HORNGREN(
5)
MERCHANDISI
NG BUSINESS
(3)
SERVICE
BUSINESS (3)
(7)
WARREN(
6)
COLLEGE
(8)
EDMOND
(7)
WARREN(
6)
COLLEGE
(8)
EDMOND
(7)
ASSET
SOURCE
TRANSACTION
10
ASSET USE
TRANSACTION
11
CLAIMS
EXCHANGE
WILD(4)
EDMOND
(7)
EDMOND
(7)
EDMOND
(7)
EDMOND
(7)
EDMOND
(7)
EDMOND
(7)
EDMOND
(7)
TRANSACTION
46
BASIC
ACCOUNTING
EQUATION
EXPANDED
ACCOUNTING
EQUATION
ASSETS
Expression
of
the
relationship EDMOND
(7)
between the assets and the claims
on those assets. p. 8
Assets = Liabilities + Owners
KIESO
Capital - Owners Drawings +
Revenues - Expenses. (p. 14).
Assets = Liabilities + Equity; Equity WILD(4)
equals [Owner capital - Owner
withdrawals
+
Revenues
Expenses] for a non-corporation;
Equity equals [Contributed capital +
Retained earnings + Revenues Expenses] for a corporation where
dividends are subtracted from
retained earnings. (p. 14)
Resources a business owns. (p. 12).
KIESO
Measurable
economic
resource PATRICA
owned by the business that is likely
to provide future benefits.
The economic resources of a NEEDLE
company that are expected to
S
benefit future operations. (LO5)
An item that is owned by a business COLLEGE
(8)
and will provide future benefits.
An economic resource that is HORNGREN(
5)
expected to be of benefit in the
future.
Economic resources that are owned ALBRECH
T(9)
or controlled by a company.
The resources owned by a business. WARREN
(6)
(12, 51)
Resources a business owns or WILD(4)
controls that are expected to
provide current and future benefits
to the business. (p. 14)
Economic resources used by a EDMOND
(7)
business to produce revenue. p. 7
CURRENT
ASSETS
PRODUCTIVE
ASSETS 17
LONG- TERM
ASSETS
RETURN ON
ASSETS
ACCOUNT
RECEIVABLE
(15)
CLAIMS 8
LIABILITIES
ALBRECH
T(9)
EDMOND
(7)
ALBRECH
T(9)
WILD(4)
WARREN
(6)
HORNGREN(
5)
COLLEGE
(8)
EDMOND
(7)
EDMOND
(7)
KIESO
CURRENT
LIABILITIES
LONG- TERM
LIABILITIES
ACCOUNT
PAYABLE (14)
NET WORTH
COLLEGE
(8)
HORNGREN(
5)
EDMOND
(7)
EDMOND
(7)
COLLEGE
(8)
(20)
NET ASSETS
CAPITAL (20)
CAPITAL
STOCK
COMMON
STOCK (P. 12)
(8)
amount by which the business
assets
exceed
the
business
liabilities.
Assets minus liabilities; owners NEEDLE
equity. (LO5)
S
The owners equity of a business; ALBRECH
T(9)
equal to total assets minus total
liabilities.
Another term for owners equity, the COLLEGE
(8)
amount by which the business
assets
exceed
the
business
liabilities.
The claim of a companys owners to HORNGREN(
5)
the assets of the business. Also
called
owners
equity
for
propriertorships and partnerships
and called shareholders equity
or stockholders equity for a
corporation.
Owners claim on the assets of a WILD(4)
business;
equals
the
residual
interest in an entitys assets after
deducting liabilities; also called net
assets. (p. 14)
Particular
businesses
or
other EDMOND
(7)
organizations for which financial
statements are prepared. p. 6
The portion of stockholders equity ALBRECH
T(9)
that represents investment by
owners in exchange for shares of
stock. Also referred to as paid- in
capital.
Corporations
basic
ownership WILD(4)
share; also generically called capital
stock. (pp. 12 & 510)
Represents the basic ownership of HORNGREN(
5)
every corporation.
Basic class of corporate stock that EDMOND
(7)
carries no preferences as to claims
DRAWINGS
KIESO
WILD(4)
13).
Withdrawals that reduce owners COLLEGE
(8)
equity as a result of the owner
taking cash or other assets out of
the business for personal use.
Distributions of capital by a HORNGREN(
5)
company to its owner.
Reduce owners equity as a result of COLLEGE
(8)
the owner taking cash or other
assets out of the business for
personal use.
Payment of cash or other assets WILD(4)
from a proprietorship or partnership
to its owner or owners. (p. 14)
REVENUES
FEES EARNED
(15)
SALES (15)
RENT
REVENUE (15)
INTEREST
REVENUE (15)
EXPENSES
(7)
assets or decrease in liabilities)
gained by providing goods or
services to customers. pp. 11, 68
The amount a business charges COLLEGE
(8)
customers for products sold or
services performed.
Gross increase in equity from a WILD(4)
companys business activities that
earn income; also called sales. (p.
14)
Revenue from providing services. WARREN
(6)
(15)
The
total
amount
charged WARREN
(6)
customers for merchandise sold,
including cash sales and sales on
account. (15, 252)
WARREN
Money received for rent. (15)
(6)
WARREN
(6)
ALBRECH
T(9)
ALBRECH
T(9)
KIESO
WILD(4)
WILD(4)
ARMSLENGTH
TRANSACTION
S
Business
dealings
between
independent and rational parties
who are looking out for their own
interests.
ALBRECH
T(9)
FINANCIAL STATEMENTS
FINANCIAL
STATEMENTS
COMPARATIVE
FINANCIAL
STATEMENTS
ANNUAL
REPORT
The
primary
means
of NEEDLE
communicating
important
S
accounting information to users.
They include the income statement,
statement
of
owners
equity,
balance sheet, and statement of
cash flows. (LO1)
Reports such as the balance sheet, ALBRECH
T(9)
income statement, and statement of
cash flows, which summarize the
financial status and results of
operations of a business entity.
Financial reports that summarize the WARREN
(6)
effects of events on a business. (17)
Documents that report on a HORNGREN(
5)
business in monetary amounts,
providing information to help people
make informed business decisions.
Primary means of communicating EDMOND
(7)
the financial information of an
organization to the external users.
The four general- purpose financial
statements
are
the
income
statement, statement of changes in
equity,
balance
sheet,
and
statement of cash flows. p. 6
Financial statements in which data ALBRECH
T(9)
for two or more years are shown
together.
A document that summarizes the ALBRECH
T(9)
results of operations and financial
status of a company for the past
EDMOND
(7)
ALBRECH
T(9)
PATRICA
EDMOND
(7)
EDMOND
(7)
EDMOND
(7)
EDMOND
(7)
COLLEGE
HEARING (5)
INCOME
STATEMENT
(8)
OPERATING
STATEMENT
(33)
STATEMENT
OF EARNINGS
(P. 21)
STATEMENT
OF
OPERATIONS
(P. 21)
PROFIT AND
LOSS
STATEMENT
(33)
NET INCOME
Statement
that
measures
the
difference
between
the
asset
increases and the asset decreases
associated with running a business.
This definition is expanded in
subsequent chapters as additional
relationships among the elements of
the
financial
statements
are
introduced. p. 14
Another name for the income
statement,
which
reports
the
profitability of business operations
for a specific period of time.
Summary of an entitys revenues,
expenses, and net income or net
loss for a specific period. Also called
the income statement or the
statement of operations.
Summary of an entitys revenues,
expenses, and net income or net
loss for a specific period. Also called
the
income
statement
or
statement of earnings.
Another name for the income
statement,
which
reports
the
profitability of business operations
for a specific period of time.
The amount by which revenues
exceed expenses. (p. 23).
p. 15 Positive difference between
revenues earned during a period
and the expenses that were incurred
to generate the revenues during the
period.
The difference between revenues
and expenses when revenues
exceed expenses. (LO5)
The excess of total revenues over
total expenses for the period.
EDMOND
(7)
COLLEGE
(8)
HORNGREN(
5)
HORNGREN(
5)
COLLEGE
(8)
KIESO
PATRICA
NEEDLE
S
COLLEGE
(8)
NET LOSS
OWNERS
EQUITY
STATEMENT
An
overall
measure
of
the
performance of a company; equal to
revenues minus expenses for the
period.
Excess of total revenues over total
expenses. Also called net earnings
or net profit.
Amount earned after subtracting all
expenses
necessary
for
and
matched with sales for a period;
also called income, profit, or
earnings. (p. 14)
Increase in net assets resulting from
operating the business. p. 16
The amount by which revenues
exceed expenses. (18)
The amount by which expenses
exceed
revenues.
(p. 23).
p. 16 Result when expenses exceed
revenues during a period.
The difference between expenses
and revenues when expenses
exceed revenues. (LO5)
The amount by which expenses
exceed revenues. (18)
The excess of total expenses over
total revenues for the period.
Excess of total expenses over total
revenues.
Excess of expenses over revenues
for a period. (p. 14)
Decrease in net assets resulting
from operating the business. p. 16
A
financial
statement
that
summarizes the changes in owners
equity for a specific period of time.
ALBRECH
T(9)
HORNGREN(
5)
WILD(4)
EDMOND
(7)
WARREN
(6)
KIESO
PATRICA
NEEDLE
S
WARREN
(6)
COLLEGE
(8)
HORNGREN(
5)
WILD(4)
EDMOND
(7)
KIESO
(p. 21).
p. 16 Financial statement that PATRICA
reports the changes in owners
equity during the period.
A financial statement that shows the NEEDLE
changes in owners equity over an
S
accounting period. (LO6)
A summary of the changes in WARREN
(6)
owners equity that have occurred
during a specific period of time,
such as a month or a year. (18)
Reports beginning capital plus net COLLEGE
(8)
income less withdrawals to compute
ending capital.
Report of changes in equity over a WILD(4)
period;
adjusted
for
increases
(owner investment and net income)
and for decreases (withdrawals and
net loss). (p. 19)
Summary of the changes in an HORNGREN(
5)
owners capital account during a
specific period.
Statement that summarizes the EDMOND
(7)
transactions occurring during the
accounting period that affected the
owners equity. p. 16
STATEMENT
OF CHANGES
IN
STOCKHOLDE
RS EQUITY 16
DIVIDEND 12
Transfer of wealth from a business EDMOND
(7)
to its owners. p. 12
Distributions
to
the
owners ALBRECH
T(9)
(stockholders) of a corporation.
EARNINGS
The
amount
of
net
income ALBRECH
T(9)
(LOSS) PER
(earnings) related to each share of
SHARE (EPS)
stock; computed by dividing net
income by the number of shares of
stock outstanding during the period.
RETAINED
The
amount
of
accumulated
ALBRECH
EARNINGS
STATEMENT
OF RETAINED
EARNINGS
BALANCE
SHEET
T(9)
earnings of the business that have
not been distributed to owners.
The amount earned over the life of a HORNGREN(
5)
business by income- producing
activities and kept (retained) for use
in the business.
Portion of stockholders equity that EDMOND
(7)
includes all earnings retained in the
business since inception (revenues
minus expenses and distributions
for all accounting periods). p. 9
A report that shows the changes in ALBRECH
T(9)
retained earnings during a period of
time.
FINANCIAL
POSITION
STATEMENT
OF FINANCIAL
POSITION (34)
STATEMENT
OF FINANCIAL
CONDITION
(34)
ACCOUNT
FORM (21)
WARREN
(6)
WARREN
(6)
ALBRECH
BALANCE
SHEET
CASH FLOWS
STATEMENT
OF CASH
FLOWS
Statement
that
explains
how
T(9)
a EDMOND
OPERATING
ACTIVITIES
INVESTING
ACTIVITIES
FINANCING
ACTIVITIES
(7)
PATRICA
NEEDLE
S
ALBRECH
T(9)
EDMOND
(7)
PATRICA
NEEDLE
S
ALBRECH
T(9)
EDMOND
(7)
PATRICA
NEEDLE
The
procedure
for
analyzing, ALBRECH
recording, classifying, summarizing, T(9)
and reporting the transactions of a
business.
DOUBLEENTRY
ACCOUNTING
DOUBLEENTRY
BOOKKEEPING
10
DEFERRAL 43
ACCRUAL 43
ACCRUAL
ACCOUNTING
43
ACCRUED
EDMOND
(7)
EDMOND
(7)
EDMOND
(7)
EDMOND
EXPENSES 46
UNEARNED
REVENUE 53
PREPAID
ITEMS 52
PREPAID
EXPENSES
(14)
ACCOUNT (22)
ACCOUNT
TITLE (22)
TEMPORARY
ACCOUNTS 18
PERMANENT
ACCOUNTS 19
CLOSING
ADJUSTING
ENTRY 46
(7)
before cash is paid. An example is
accrued salaries expense. p. 46
Revenue for which cash has been EDMOND
(7)
collected but the service has not
yet been performed. p. 53
Deferred expenses. An example is EDMOND
(7)
prepaid insurance. p. 52
Items such as supplies that will be WARREN(
6)
used in the business in the future.
Also see deferred expenses. (14,
106)
A
separate
record
used
to
summarize changes in each asset,
liability, and owners equity of a
business.
Records used for classifying and
summarizing transaction data; subclassifications of financial statement
elements. p. 7
Provides a description of the
particular type of asset, liability,
owners
equity,
revenue,
or
expense.
Accounts used to collect information
for a single accounting period
(usually revenue, expense, and
distribution accounts). p. 18
Accounts that contain information
transferred from one accounting
period to the next. p. 19
Process of transferring balances
from temporary accounts (Revenue,
Expense, and Dividends) to the
permanent
account
(Retained
Earnings). p. 18
Entry
that
updates
account
balances prior to preparing financial
COLLEGE
(8)
EDMOND
(7)
COLLEGE
(8)
EDMOND
(7)
EDMOND
(7)
EDMOND
(7)
EDMOND
(7)
OWNER
WITHDRAWAL
S (P. 14)
PROFIT (2)
The
difference
between
the
amounts received from customers
for goods or services provided and
the amounts paid for the inputs
used to provide the goods or
services. (2)
GAINS
Money made or lost on activities
(LOSSES)
outside the normal operation of a
company.
RETURN (P. 26)
Monies
received
from
an
investment; often in percent form.
(p. 26)
INTEREST 7
Fee paid for the use of borrowed
funds; also refers to revenue from
debt securities. pp. 7, 181
PERIOD COSTS General, selling, and administrative
51
costs that are expensed in the
period in which the economic
sacrifice is made. pp. 93, 51, 371
GROSS PROFIT The excess of net sales revenue
(GROSS
over the cost of goods sold.
MARGIN)
GENERAL
WILD(4)
WILD(4)
WARREN(
6)
ALBRECH
T(9)
WILD(4)
EDMOND
(7)
EDMOND
(7)
ALBRECH
T(9)
LEDGER 13
accounting systems. p. 13
INTERNAL
USERS (P. 6)
Persons
using
accounting
information
who
are
directly
involved
in
managing
the
organization. (p. 6)
Persons
using
accounting
information who are not directly
involved
in
running
the
organization. (p. 5)
EXTERNAL
USERS (P. 5)
(7)
WILD(4)
WILD(4)
NEEDLE
S
ALBRECH
T(9)
NEEDLE
S
NEEDLE
S
BUDGETING
(10)
COMPREHENSI
VE INCOME
CONCEPTUAL
FRAMEWORK
(P. 9)
CONTROL
ACTIVITIES
(PROCEDURES
)
CONTROL
ENVIRONMENT
The
actions,
policies,
and
procedures that reflect the overall
attitudes of top management about
control and its importance to the
entity.
DETECTIVE
Internal control activities that are
CONTROLS
designed to detect the occurrence
of errors and fraud.
PREVENTATIVE Internal control activities that are
CONTROLS
designed to prevent the occurrence
of errors and fraud.
INTERNAL
Safeguards in the form of policies
CONTROL
and procedures established to
STRUCTURE
provide management with reason
able assurance that the objectives
of an entity will be achieved.
WILD(4)
ALBRECH
T(9)
ALBRECH
T(9)
ALBRECH
T(9)
ALBRECH
T(9)
INDEPENDENT
CHECKS
WILD(4)
EDMOND
(7)
EDMOND
(7)
ALBRECH
T(9)
ALBRECH
T(9)
INTERNAL
EARNINGS
TARGETS
MATERIALITY
CONSTRAINT
(P. 12)
OPPORTUNITY
67
WILD(4)
PHYSICAL
SAFEGUARDS
REALIZATION
42
SEGREGATION
OF DUTIES
VERTICAL
STATEMENTS
MODEL 61
EXCHANGE
RATE
NEEDLE
S
FRAUDULENT
FINANCIAL
REPORTING
NEEDLE
S
INDEPENDENC
NEEDLE
to EDMOND
(7)
WILD(4)
INTEGRITY
Honesty,
candidness,
and
the
subordination of personal gain to
service and the public trust. (LO7)
NEEDLE
S
LIQUIDITY
PROFITABILIT
Y
NEEDLE
S
MONEY
MEASURE
NEEDLE
S
OBJECTIVITY
NEEDLE
S