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Principles of Accounting VYC1
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Principles of Accounting VYC1
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Principles of Accounting VYC1Accounts Payable - ANS-Amounts a business must pay in the future.
Accounts Receivable - ANS-Claims for future collection from customers.
Assets - ANS-Property owned by a business.
Balance Sheet - ANS-A formal report of a business' financial condition on a certain date;
reports the assets, liabilities, and owner's equity of the business.
Break Even - ANS-A point at which revenue equals expenses.
Business Transactions - ANS-A financial event that changes the resources of a firm.
Capital - ANS-Financial investment in a business; equity.
Equity - ANS-An owner's financial interest in a business.
Expense - ANS-An outflow of cash, use of other assets, or incurring of a liability.
Fair Market Value - ANS-The current worth of an asset or the price the asset would
bring if sold on the open market.
Fundamental Accounting Equation - ANS-The relationship between assets and liabilities
plus the owner's equity.
Income Statement - ANS-A formal report of business operations covering a specific
period of time; also called a profit and loss statement or a statement of income and
expenses.
Liabilities - ANS-Debts or obligations of a business.
Net Income - ANS-The result of an excess of revenue over expenses.
Net Loss - ANS-The result of an excess of expenses over revenue.
On Account - ANS-An arrangement to allow payment at a later date; also called a
charge account or open-account credit.
,Owner's Equity - ANS-The financial interest of the owner of a business; also called
proprietorship or net worth.
Revenue - ANS-An inflow of money or other assets that results from the sales of goods
or services or from the use of money or property; also called income.
Statement of Owner's Equity - ANS-A formal report of changes that occurred in the
owner's financial interest during a reporting period.
Withdrawals - ANS-Funds taken from the business by the owner for personal use.
Accounting - ANS-The process by which financial information about a business is
recorded, classified, summarized, interpreted, and communicated to owners, managers,
and other interested parties.
Accounting System - ANS-A process designed to accumulate, classify, and summarize
financial data.
Auditing - ANS-The review of financial statements to assess their fairness and
adherence to generally accepted accounting principles.
Auditor's Report - ANS-An independent accountant's review of a firm's financial
statements.
Certified Public Accountant (CPA) - ANS-An independent accountant who provides
accounting services to the public for a fee.
Corporation - ANS-A publicly or privately owned business entity that is separate from its
owners and has a legal right to own property and do business in its own name;
stockholders are not responsible for the debts or taxes of the business.
Creditor - ANS-One to whom money is owned.
Discussion Memorandum - ANS-An explanation of a topic under consideration by the
Financial Accounting Standards Board.
Economic Entity - ANS-A business or organization whose major purpose is to produce a
profit for its owners.
, Entity - ANS-Anything having its own separate identity, such as an individual, a town, a
university, or a business.
Exposure Draft - ANS-A proposed solution to a problem being considered by the
Financial Accounting Standards Board.
Financial Statements - ANS-Periodic Reports of a firm's financial position or operating
results.
Generally Accepted Accounting Principles (GAAP) - ANS-Accounting standards
developed and applied by professional accountants.
Governmental Accounting - ANS-Accounting work performed for a federal, state, or
local governmental unit.
International Accounting - ANS-The study of accounting principles used by different
countries.
Management Advisory Services - ANS-Services designed to help clients improve their
information systems or their business performance.
Managerial Accounting - ANS-Accounting work carried on by an accountant employed
by a single business in industry.
Partnership - ANS-A business entity owned by two or more people who are legally
responsible for the debts and taxes of the business.
Public Accountants - ANS-Members of firms that perform accounting services for other
companies.
Separate Entity Assumption - ANS-The concept of keeping a firm's financial records
separate from the owner's personal financial records.
Social Entity - ANS-A nonprofit organization, such as a city, public school, or public
hospital.
Sole Proprietorship - ANS-A business entity owned by one person who is legally
responsible for the debts and taxes of the business.
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