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Accounting

Terms in this set (32)

Accounting
process of retrieving, recording, storing and summarizing financial transactions
for a business
Bookkeeping
process of recording daily business transactions; only one part of the
accounting process
Manual Accounting System
maintaining accounting records by hand
Computer Accounting System
maintaining accounting records with the help of computer software
Stakeholder
person who has an interest in a company
Profit
amount earned is greater than the amount spent
Loss
amount earned is less than amount spent; a loss occurs when there is no profit
Creditor
person or company which lends money to another person or company
Financial Accounting
form of accounting which produces information for external use through
financial statements
Management Accounting
produces information mainly for company/management use
Tax Accounting
accounting method used to record tax transactions
Financial Reporting
process of using information gathered from financial transactions and records
Generally Accepted Accounting Principles (GAAP)
common set of accounting rules and procedures; needed in accounting to
maintain accuracy and consistency of financial reports
Cost Principle
actual cost of an item needs to be stated, not its current value
Reliability Principle
accountants must only record information which can be verified
Disclosure Principle
all information which is relevant to financial statement must be included in the
financial statement
Matching Principle
expenses must be reported at the same time of the corresponding (matching)
revenue
Going Concern Principle
assumption a company intends to continue operations
Ethical Responsibility
duty to uphold rules and regulations based on moral values
Shareholders
individuals who own part of a company through stock ownership
Social Responsibility
taking actions which benefit society as a whole
Social Cost
additional costs beyond normal business costs due to an activity or policy
Accountants
records financial transactions and prepare financial reports
Management Accountant
records and analyzes financial information for internal use by managers
Government Accountant
maintains and examines records of government agencies
Public Accountant
provides services to corporations, governments and individuals; can provide
services to multiple companies at once
Internal Auditor
examines financial records of companies to ensure proper management of
funds; usually provides information to law enforcement if necessary
General Ledger Accountant
ensures business transactions are properly recorded
International Accountant
specializes in recording and analyzing international (non-GAAP) business
transactions
Forensic Accountant
specializes in examining accounting transactions for law enforcement
Certified Public Accountant (CPA)
designation provided to accountants who have passed the CPA exam and its
requirements
Certified Management Accountant (CMA)
designation provided to accountants who have passed the CMA exam and its
requirements; CMAs specialize more in financial management than CPAs
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