Accounting Ch.1 part 3
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Created by:
hayleytrace on September 14, 2011
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10 terms
Terms | Definitions |
|---|---|
 financial accounting | the branch of accounting that provides information to people outside the firm |
| financial statements | business documents that report financial information about a business entity to decision makers |
| financial activities | activities that obtain from investors and creditors the cash needed to launch and sustain the business; a section of the statement of cash flows |
| fixed assets | another name for property, plant, and equipment |
| generally accepted accounting principles (gaap) | accounting guidelines, formulated by the financial accounting standards board, that govern how accounting is practiced |
| going-cocern assumption | holds that the entity will remain in operation for the foreseeable future |
| historical cost principle | principle that states that assets and services should be recorded at their actual cost |
| income statement | a financial statement listing an entity's revenues, expenses, and net income or net loss for a specific period also called the statement of operations |
| international financial reporting standards (ifrs) | accounting guidelines, formulated by the international accounting standards board. by 2014 us gaap is expected to be harmonized with ifrs. at that time, us companies are expected to adopt these principles for their financial statements, so that they can be compared with those of companies from other countries |
| investing activities | activities that increase or decreases the long-term assets available to the business; a section of the statement of cash flows |
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