ACCT 1A - Chapter 1 Introduction to Accounting and Business

The father of accounting

Luca pacioli

GAAP

generally accepted accounting principles Generally accepted guidelines for the preparation of financial stements.

Accounting Equation

Assets = Liabilities + Owner's Equity

Expanded Accounting Equation

Assets = Liabilities + Owner's Equity + Revenue - Expenses

corporation

A business organized under state or federal statutes as a separate legal entity.

account receivable

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

cost concept

A concept of accounting that determines the amount initially entered into the accounting records for purchases.

business entity concept

A concept of accounting that limits the economic data in the accoutning system to data related directly to the activiteis of the business.

balance sheet

A list of the Assets, Liabilities, and Owner's Equity as of a specific DATE, usually at the close of the last day of a month or a year.

business transaction

An ecomonic event or condition that directly changes an entity's financial condition or directly affects its results of operations.

accounting

An information system that provides reports to stakeholders aout the economic activities and condition of a business.

business

An organization in which basic resources (inputs), such as materials and labor, are assermbled and processed to provide goods or services (outputs) to customers.

CPA

Certified Public Accountant

FASB

Financial Accounting Standards Board The authoritative body that has the primary responsibility for developing accounting principles.

account form

The form of balance sheet that resembles the basic format of the accounting equation, with assets on teh left side and Liabilities and Owner's Equity sections on teh right side.

account payable

The liability created by a purchase on account.

assets

The resources owned by a business.