Chapter 1 - Intro
Sole proprietorship
A business owned by one person who is legally responsible for all debts and taxes.
Partnership
A business owned by two or more people who are legally responsible for the debts and taxes or the business.
Tax accounting
A business that provides tax compliance and tax planning services
Accounting system
A process designed to accumulate, classify, and summarize financial data.
Corporation
A publicly or privately owned business that is separate from its owners; has a legal right to own property and do business in its name.
Public accountants
Accountants who work for firms that perform accounting services for other companies.
Auditors report
An independent accountant's review of a firms financial statements.
Certified Public Accountant
CPA An independent accountant who provides accounting services to the public for a fee.
Stock
Certificates that represent ownership in the corporation
Generally Accepted Accounting Principles
GAAP - Accounting standards developed and applied by professional accountants
Creditor
One to whom money is owed
Stockholders/shareholders
Owners of the corporation
Financial Statements
Periodic reports of a firms financial position or operating results.
Separate entity assumption
The concept of keeping a firms financial records separate from the owner's personal financial records.
Accounting
The process by which financial information about a business is recorded, classified, summarized, interpreted, and communicated to owners, managers and other interested parties
Auditing
The review of financial statements to assess their fairness and adherence to GAAP.
Managerial accounting
Work performed by an accountant for a single business.
Government accounting
Work performed for a federal, state or local government