Ch. 1 The Language of Business- College Acctg 14e Price Haddock Farina
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Accounting
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The process by which financial information about a business is recorded, classified, summarized, interpreted, and communicated to owners, managers, and other interested parties
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Accounting system
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A process designed to accumulate, classify, and summarize financial data
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Auditing
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The review of financial statements to assess their fairness and adherence to generally accepted accounting principles
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Auditor's report
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An independent accountant's review of a firm's financial statements
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Certified public accountant (CPA)
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An independent accountant who provides accounting services to the public for a fee
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Corporation
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A publicly or privately owned business entity that is separate from its owners and has a legal right to own property and do business in its own name; stockholders are not responsible for the debts or taxes of the business
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Creditor
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One to whom money is owed
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Discussion memorandum
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An explanation of a topic under consideration by the Financial Accounting Standards Board
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Economic entity
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A business or organization whose major purpose is to produce a profit for its owners
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Entity
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Anything having its own separate identity, such as an individual, a town, a university, or a business
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Exposure draft
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A proposed solution to a problem being considered by the Financial Accounting Standards Board
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Financial statements
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Periodic reports of a firm's financial position or operating results
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Generally accepted accounting principles (GAAP)
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Accounting standards developed and applied by professional accountants
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Governmental accounting
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Accounting work performed for a federal, state, or local governmental unit
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International accounting
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The study of accounting principles used by different countries
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Management advisory services
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Services designed to help clients improve their information systems or their business performance
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Managerial accounting
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Accounting work carried on by an accountant employed by a single business in industry
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Partnership
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A business entity owned by two or more people who are legally responsible for the debts and taxes of the business
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Public accountants
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Members of firms that perform accounting services for other companies
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Separate entity assumption
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The concept of keeping a firm's financial records separate from the owner's personal financial records
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Social entity
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A nonprofit organization, such as a city, public school, or public hospital
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Sole proprietorship
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A business entity owned by one person who is legally responsible for the debts and taxes of the business
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Statements of Financial Accounting Standards
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Accounting principles established by the Financial Accounting Standards Board
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Stock
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Certificates that represent ownership of a corporation
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Stockholders
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The owners of a corporation; also called shareholders
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Tax accounting
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A service that involves tax compliance and tax planning
