Chapter 5: Accounting Reports & the Outside World
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Created by:
theearthbounder on August 21, 2010
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11 terms
Terms | Definitions |
|---|---|
 Audit | The check of business accounting records in order to give an opinion on whether the financial statements present the business fairly. |
| Auditors | Certified public accountants who audit accounting records. |
| Certified Public Accountants | (CPA) Accountants licensed by the state as professional independent verifiers of business financial statements. |
| Financial Accounting Standards Board | (FASB) The organization of accountants that has the responsibility of creating accounting rules. |
| Generally Accepted Accounting Principles | (GAAP) The rules of accounting that everyone must follow. |
| Managerial Accounting | The skill of providing financial information to run a large business. |
| Conservative Principle | The accounting principle that requires accountants to resolve financial statement uncertainty in the least favorable way. |
| Going-Concern Principle | The accounting principle that requires that financial statements be based on the assumption that the business will last indefinitely. |
| Historical Cost Principle | The accounting principle that requires assets to be reported on balance sheets at their historical cost. |
| Objectivity Principle | The accounting principle that requires business transactions to be recorded using the best objective evidence. |
| Stable Monetary Unit Principle | The accounting principle that assumes that the value of money stays the same year after year. |
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