The preservation of a systematic, quantitative record of an activity
The procedures and processes used by a business to analyze transactions, handle routine bookkeeping tasks, and structure information so it can be used to evaluate the performance and health of a business.
A system for providing quantitative, financial information about economic entities that is useful for making sound economic decisions. It provides the means of recording and communicating business activities and the results of those activities
An organization operated with the objective of making a profit from the sale of goods or services.
An entity without a profit objective, oriented toward providing services efficiently and effectively.
Comes from 3 sources: (1) investors (owners), (2) creditors (lenders), and (3) the business itself in the form of earnings that have been retained.
The procedure for analyzing, recording, classifying, summarizing, and reporting the transactions of a business.
The area of accounting concerned with providing internal financial reports to assist management in making decisions
A document that summarizes the results of operations and financial status of a company for the past year and outlines future plans.
Reports such as the balance sheet, income statement, and statement of cash flows, which summarize the financial status and results of operations of a business entity
The area of accounting concerned with reporting financial information to interested external parties
The balance sheet
Reports the resources of a company (the assets), the company's obligations (the liabilities), and the owners' equity, which represents the difference between what is owned (assets) and what is owed (liabilities)
The income statement
Reports the amount of net income earned by a company during a period.
The statement of cash flows
Reports the amount of cash collected and paid out by a company in the following three types of activities: operating, investing, and financing
Securities and Exchange Commission
The government body responsible for regulating the financial reporting practices of most publicly owned corporations in connection with the buying and selling of stocks and bonds. Monitors the financial accounting disclosures of companies whose stocks trade on the U.S. stock exchange.
International Trade Commission
Uses financial accounting information to determine whether the importation of outsider goods is harming U.S. companies through unfair trade practices
Uses financial statement data to evaluate whether companies are earning excessive monopolistic profits
Financial Accounting Standards Board (FASB)
The private organization responsible for establishing the standards for financial accounting and reporting in the United States. Has no authority in it and of itself, but gets its authority from the SEC.
Generally accepted accounting principles (GAAP)
Authoritative guidelines that define accounting practice at a particular time.
Certified public accountant (CPA)
A special designation given to an accountant who has passed a national uniform examination and has met other certifying requirements.
American Institute of Certified Public Accountants (AICPA)
The national organization of CPAs in the United States
Internal Revenue Service (IRS)
A government agency that prescribes the rules and regulations that govern the collection of tax revenues in the United States
International Financial Reporting Standards (IFRSs)
A general term that describes an international set of generally accepted accounting standards.
International Accounting Standards Board (IASB)
A committee formed to develop worldwide accounting standards