Accounting

Service business

A business providing services rather that products to customers.

Account receivable

A claim against the customer created by selling merchandise or services on credit.

Matching concept

A concept of accounting in which expenses are matched with the revenue generated during a period by those expenses.

Unit of measure concept

A concept of accounting requiring that economic data be recorded in dollars.

Business entity concept

A concept of accounting that limits the economics data in the accounting system to data related directly to the activities of the business.

Objectivity concept

A concept of accounting that requires accounting records and the data reported in financial statements to be based on objective evidence.

Balance sheet

A list of the assets, liabilities, and stockholders' equity as of a specific date, usually at the close of the last day of a month or a year.

Statement of cash flows

A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.

Retained earnings statement

A summary of the changes in the retained earnings for a specific period of time, such as a month or a year.

Income statement

A summary of the revenue and expenses for a specific period of time, such as a month or a year.

Manufacturing businesses

A type of business that changes basic inputs into products that are sold to individual customers.

Merchandising businesses

A type of business that purchases products form other businesses and sells them to customers.

General-purpose financial statements

A type of financial accounting report that is distributed to external users. The term "general purpose" refers to the wide range of decision-making needs that the reports are designed to serve.

Securities and Exchange Commission

An agency of the U.S. government that has authority over the accounting and financial disclosures for companies whose shares of ownership are traded and sold to the public.

Business

An organization in which basic resources, such as materials and labor, are assembled and processed to provide goods or services to customers.

International Accounting standards board

An organization that issues International Financial Reporting Standards for many countries outside the United States.

Expenses

Assets used up or services consumed in the process of generating revenues.

Accounting equation

Assets=liabilities+owner's equity

Dividends

Distribution of a corporation's earnings to stockholders.

Financial statements

Financial reports that summarize the effects of events on a business.

Generally accepted accounting principles

Generally accepted guidelines for the preparation of financial statements.

Revenue

Increase in owner's equity as a result of selling services or products to customers.

Prepaid expenses

Items such as supplies that will be used in the business in the future.

Interest revenue

Money received for interest

Rent revenue

Money received for rent

Ethics

Moral principles that guide the conduct of individuals.

Retained earnings

Net income retained in a corporation

Certified Public Accountants

Public accountants who have met a state's education, experience, and examination requirements.

Fees earned

Revenue from providing services

Net loss

The amount by which expenses exceed revenues.

Net income or net profit

The amount by which revenues exceed expenses.

Financial accounting standards board

The authoritative body that has the primary responsibility for developing accounting principles.

Financial accounting

The branch of accounting that is concerned with recording transactions using generally accepted accounting principles for a business or other economic unity and with a periodic preparation of various statements form such records.

Management accounting

The branch of accounting that uses both historical and estimated data in providing information that management used in conducting daily operations, in planning future operations, and in developing overall business strategies.

Profit

The difference between the amounts received from customers for goods or services provided and the amounts paid for the inputs used to provide the goods or services.

Public accounting

The field of accounting where accountants and their staff provide services on a fee basis.

Private accounting

The field of accounting whereby accountants are employed by a business firm or a not-for-profit organization.

Account form

The form of balance sheet that resembles the basic format of the accounting equation, with assets on the left side and liabilities and stockholders' equity sections on the right side.

Account payable

The liability created by a purchase on account

Owner's equity

The owner's right to the assets of the business.

Stockholder's equity

The owners' equity in a corporation.

Capital Stock

The portion of a corporation's stockholders' equity contributed by investors in exchange for shares of stock.

Sales

The total amount charged customers for merchandise sold, including cash sales and sales on account.