Accounting
AAA
American Accounting Association
AICPA
American Institute of Certified Public Accountants
FASB
Financial Accounting Standards Board
GAAP
Generally Accepted Accounting Procedures
GAAP
Must be followed by publicly owned companies unless they can show that doing so would produce misleading information.
SEC
Securities and Exchange Commission
Social Entitys
are non-profit organizations, such as cities, public schools & public hospitals.
Auditor's Report
contains the auditor's opinion about the fair presentation of the operating results and financial position of the business and also confirms the financial information is prepared in conformity with generally accepted accounting principles
Separate Entity Assumption
describes the concept of keeping the firms financial records separate from the owners financial records.
Corporation
is a business entity that is separate from its owners. A corporation has a legal right to own property and do business in its own name.
Stock o closely held corporations
is not traded on an exchange.
Auditing
is the review of financial statements to assess their fairness and adherence to generally accepted accounting principles. Accountants who are CPA's perform financial audits
Closely held corporations
privately owned corporations
The accounting process involves
recording, classifying, summarizing, interpreting, and communicating financial information about an economic or social entity.
Managerial accounting
referred to as private accounting involves working for a single business in industry.
The SEC is responsible for
reviewing the accounting methods used by publicly owned corporations. The SEC has delegated this review to the accounting profession but still has the final say on any financial accounting issue faced by publicly owned corporations. If the sec does not agree with the reporting that results from an accounting method, the SEC can suspend trading on a company's shares on the stock exchange.
discussion memorandum
to explain the topic being considered
Accounting system
used to accumulate data about a firm's financial affairs, classify the data in a meaningful way, and summarize it in periodic reports called financial statements.
Accountant
Accountant positions usually require a bachelor's degree but are sometimes filled by experienced bookkeepers or individuals with a two-year college degree. Most entry level accountant positions do not have an experience requirement. Both the education and experience requirements vary depending on the size of the firm.
Accounting Clerk
Accounting clerk positions require one to two accounting courses and little or no experience.
Accounting Defined
Accounting is the process by which financial information about a business is recorded, classified, summarized, interpreted & communicated to owners, managers & other interested parties.
What is accounting?
Accounting provides financial information about a business or non-profit organization. Owners, Investors, & Managers & other interested parties need financial information to make decisions. Because accounting is used to communicate financial information, it is often called the language of business.
Bookkeeper
Bookkeeper positions usually require one to two years of accounting education plus experience as an accounting clerk
The accountant
Establishes the records and procedures that make up the accounting system. Supervises the operation of the system. Interprets the resulting financial information
IASC
International Accounting Standards committee was formed in 1973
Tax Accounting
Involves tax planning and tax compliance. IT deals with the preparation of tax returns and the sudit of those returns. It involves giving advice to clients on how to structure their financial affairs in order to reduce their tax liability.
Sole proprietorship
The owner of a sole proprietorship is legally responsible for the debts and taxes of the business. If the business is unable to pay its debts, the creditors (people, companies or government agencies to whom the business owes money) can turn to the owner for payment.
CPA
To become a CPA, an individual must have a certain number of college credits in accounting courses, demonstrate good personal character, pass the uniform CPA examination & fulfill the experience requirements of the state of practice.
Corporate owners called stockholders or shareholders
are not personally responsible for the debts or taxes of the corporation. If the corporation is unable to pay its bills the most stockholders can lose is their investment in the business
Management advisory Services
helping clients improve their information system or their business performance
Governmental accounting
involves keeping financial records and preparing financial reports as part of the staff of federal, state or local governmental units.
AAA definition
is a group of accounting educators who research possible effects of a proposed FASB statement and offer their opinions
Partnership
is an entity owned by two or more people. The partnership structure is common in businesses that offer professional services such as law firms, accounting firms, architecture firms, medical practices & dental practices. At the beginning of the partnership, two or more individuals enter into a contract that details the rights, obligations & limitations of each partner, including the amount each partner will contribute to the business, each partners percentage of partnership, each partners share of the profits, the duties each partner will perform, the responsibility each partner has for the amounts owed by the business to creditors and tax authorities.
Entity
is recognized as having its own separate identity. An entity may be an individual, a town, university or a business.
International Accounting
is the study of the accounting principles used by different countries
Stock
issued in the form of stock certificates, represents the ownership of the corporation.
Managerial accountants
perform activities including: establishing accounting policies, managing the accounting system, preparing financial statements, interpreting financial information, providing financial advice to management, preparing tax forms, performing tax planning services, preparing internal reports for management
Accountants usually choose to practice in one of three areas
public accounting, managerial accounting or governmental accounting
Economic Entity
refers to a business or organization whose major purpose is to produce a profit for its owners.