ACCT-2301 Chapter One – Flashcards
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Partnership
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Business owned by two or more persons.
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Corporation
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Entity legally separate from its owners.
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Sole proprietorship
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Business owned by a single person.
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Revenues
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Amounts earned from sales of products or services.
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Stockholders' equity
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Owners' claims to resources.
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Dividends
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Distributions to stockholders.
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Expenses
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Costs of selling products or services.
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Assets
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Resources owned.
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Liabilities
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Amounts owed.
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Statement of stockholders' equity
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Change in owners' claims to resources
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Income statement
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Profitability of the company
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Statement of cash flows
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Change in cash as a result of operating, investing, and financing activities
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Balance sheet
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Resources equal creditors' and owners' claims to those resources
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Monetary unit
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A common denominator is needed to measure all business activities.
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Economic entity
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Economic events can be identified with a particular economic body.
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Going concern
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In the absence of information to the contrary, it is anticipated that a business entity will continue to operate indefinitely.
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Periodicity
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The economic life of a company can be divided into artificial time intervals for financial reporting.
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Securities and Exchange Commission
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Group that has been given power by Congress to enforce the proper application of financial reporting rules for companies whose securities are publicly traded.
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Financial Accounting Standards Board
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Independent, private-sector group that is primarily responsible for setting financial reporting standards in the United States.
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Auditors
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Independent intermediaries that help to ensure that management appropriately applies financial reporting rules in preparing the company's financial statements.
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International Accounting Standards Board
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Body that is attempting to develop a single set of high-quality, understandable global accounting standards.
