Recording, classifying, summarizing, and interpreting of financial events and transaction to provide management and other interested parties the info they need to make good decisions.
Accounting used to provide info and analyses to managers inside the organization to assist them in decision making.
Certified Management Accountant (CMA)
Professional accountant who has met certain educational and experience requirements, passed a qualifying exam, and was certified by the institute of certified management accountants.
Accounting info and analyses prepped for people outside the organization.
A yearly statement of the financial condition, progress, and expectations of an organization.
Accountant who works for a single firm, gov't agency, or nonprofit organization
Accountant who provides accounting services to individuals or businesses on a fee basis.
Certified Public Accountant (CPA)
Accountant who passes a series of exams established by the American Institution of Certified Public Accountants (AICPA)
Job reviewing and evaluating info used to prep a company's financial statements.
Evaluation and unbiased opinion about the accuracy of a company's financial statements.
Certified Internal Auditor (CIA)
Accountant who has a bachelor's degree and 2 years experience in internal auditing and who has passed and exam from the institute of internal auditors.
Accountant trained in tax law and responsible for prepping tax returns or developing tax strategies.
Government and not-for-profit accounting
Accounting system for organizations whose purpose is not generation a profit, but serving ratepayers, taxpayers, and others according to a duty approved budget.
Six-step procedure that results in the preparation and analysis of the major financial statements.
Recording the businesses transactions
Record book or computer program where accounting data is first entered.
Practice of writing every business transaction in two places.
Specialized accounting book or computer program in which info from accounting journals is accumulated into specific categories and posted so that managers can find all the info about one account in the same place.
Summary of all the financial data in the account ledgers that ensures the figures are correct and balanced.
Reports the firm's financial condition on a specific date.
Fundamental Accounting equation (basis for the balance sheet)
Economic resources owned by a firm
The each with which an asset can be converted into cash.
items that can or will be converted into cash within one year.
Assets that are relatively permanent such as land, buildings, and equipment.
Long-term assets that have no physical form but do have value.
What the business owes to others (debts)
Current liabilities are bills the company owes to others for it's merchandise or services purchased on credit but not yet paid for. (IOU)
Short-term and Long-term liabilities that a business promises to pay at a certain date.
Long-term liabilities that represent money lent to the firm that must be paid back.
Amount of the business that belongs to the owners-liabilities owned to the business.
Accumulated earning from a firm's profitable operations that were reinvested in the business and not paid out to stockholders in dividends.
Financial statement that shows a firm's profit after costs, expenses, and taxes.
- Cost of goods sold
= Gross Profit
- operating expenses
= Net income (before taxes)
= Net income (or loss)
Net income (net loss)
Revenue left over after all costs and expenses, including taxes, are paid.
Cash coming in- cash going out