Accounting

lender

bank or other institution that has the primary purpose of lending money

transaction

business activity or event that has an effect on financial information presented on financial statements

service business

business that does not sell tangible products to customers but rather sells intangible benefits (services) to customers; can be either a for-profit or a not-for-profit organization

creditor

business that grants extended, but short-term, payment terms to other businesses

generally accepted accounting principles (GAAP)

common set of rules, standards, and procedures that publicly traded companies must follow when composing their financial statements

privately held company

company whose stock is available only to employees or select individuals or groups

publicly traded company

company whose stock is traded (bought and sold) on an organized stock exchange

Securities and Exchange Commission (SEC)

federal regulatory agency that regulates corporations with shares listed and traded on security exchanges through required periodic filings

manufacturing business

for-profit business that is designed to make a specific product or products

retail business

for-profit business that purchases products (called inventory) and resells the products without altering them

for-profit business

has the primary purpose of earning a profit by selling goods and services

not-for-profit (NFP) accounting

including charities, universities, and foundations, helps ensure that donor funds are used for the intended mission of the not-for-profit entity

Financial Accounting Standards Board (FASB)

independent, nonprofit organization that sets financial accounting and reporting standards for both public and private sector businesses in the United States that use Generally Accepted Accounting Principles (GAAP)

financial accounting

measures the financial performance of an organization using standard conventions to prepare financial reports

stockholder

owner of stock, or shares, in a business

auditing

process of ensuring activities are carried out as intended or designed

consulting

process of giving advice or guidance on financial and nonfinancial impact of a course of action

accounting

process of organizing, analyzing, and communicating financial information that is used for decision-making

governmental accounting

process of tracking the inflows and outflows of taxpayer funds using prescribed standards

managerial accounting

process that allows decision makers to set and evaluate business goals by determining what information they need to make a particular decision and how to analyze and communicate this information

governmental entity

provides services to the general public (taxpayers)

cost accounting

recording and tracking of costs in the manufacturing process

stakeholder

someone affected by decisions made by a company; may include an investor, creditor, employee, manager, regulator, customer, supplier, and layperson

Governmental Accounting Standards Board (GASB)

source of generally accepted accounting principles (GAAP) used by state and local governments in the United States; is a private nongovernmental organization

nonprofit (not-for-profit) organization

tax-exempt organization that serves its community in a variety of areas