Accounting

asset

Something the business owns that is expected to have economic value in the future

Standard Budgeting

A method of business forecasting and control in which specific expected volumes and prices per unit are used.

Liabilities

Legally enforceable obligations that will require the business to give up assets or to forego receiving assets in the future

Equity

Owners claim on the value of the money produced by the business. Produced as a percentage.

Pro forma financial statements

Planning documents for future business activities that are formatted to look like the common financial statements of the income statement, balance sheet, and statement of cash flows.

Equity Ratio

Portion of profits that are divided upon the business and it's shareholders. Depending on how much equity (money invested in company) a shareholder has will depend on the amount of the ratio (percentage)

Business entity concept

The concept that a business has an existence separate from that of its owners

Owner's Equity

The difference between assets and liabilities of a business ( LIABILITIES -ASSETS) Owners of the business do not own the assets of the business they only have a claim on the assets.

Generally Accepted Accounting Principles (GAAP)

The standardized rules for accounting procedures set out. By the financial accounting standards board and used in all audits and submissions of accounting reports to the government.

Accounting equation

The statement that assets equal liabilities plus owners equity ASSETS= LIABILITIES + OWNERS EQUITY

Statement of cash flows

A statement of the sources and uses of cash in a business for a specific period of time. Also called a cash flow statement.

Balance sheet

A statement of what a business owns (assets), what it owes to others (liabilities), and how much value the owners have invested in it (equity)

Income statement

A statement that lists revenues and expenses and shows the amount of profit a business makes for a specified period of time.

Going concern concept

The accounting concept that a business is expected to continue in existence for the foreseeable future

The financial Accounting standards board (FASB)

The body that establishes and maintains standards for financial accounting.

Profit planning

The process of creating a set of interconnected budgets that combine into a master budget that can be used for assessing and controlling the business processes.