Glossary of Accounting Terms: A Comprehensive Guide, Quizzes of Introduction to Public Administration

Download Glossary of Accounting Terms: A Comprehensive Guide and more Quizzes Introduction to Public Administration in PDF only on Docsity! TERM 1 Parties who are interested in the activities of a business because theyre affected by them. DEFINITION 1 stakeholders TERM 2 System for measuring and summarizing business activities, interpreting financial information, and communicating the results to management and other decision makers. DEFINITION 2 accounting TERM 3 Branch of accounting that provides information and analysis to decision makers inside the organization to help them operate the business. DEFINITION 3 management accounting TERM 4 Branch of accounting that furnishes information to individuals and groups both inside and outside the organization to help them assess the firms financial performance. DEFINITION 4 financial accounting TERM 5 Financial reportsincluding the income statement, the balance sheet, and the statement of cash flowsthat summarize a companys past performance and evaluate its financial health. DEFINITION 5 financial statements TERM 6 Uniform set of rules for financial reporting established by an independent agency called the Financial Accounting Standards Board (FASB). DEFINITION 6 generally accepted accounting principles (GAAP) TERM 7 Financial statement summarizing a businesss revenues, expenses, and net income. DEFINITION 7 income statement TERM 8 Amount of money earned by selling products to customers. DEFINITION 8 revenues TERM 9 Costs incurred by selling products to customers. DEFINITION 9 expenses TERM 10 Cost of the products that a business sells to customers. DEFINITION 10 cost of goods sold TERM 21 Debt owed by a business to an outside individual or organization DEFINITION 21 liability TERM 22 Amount that is invested in a business by its owners and that owners can claim from its assets. DEFINITION 22 owners equity TERM 23 Companys designated business year. DEFINITION 23 fiscal year TERM 24 Accounting tool showing the resources of a business (assets) and the claims on those resources (liabilities and owners equity). DEFINITION 24 accounting equation TERM 25 Record of cash that will be received from a customer to whom a business has sold products on credit. DEFINITION 25 account receivable TERM 26 Record of cash owed to sellers from whom a business has purchased products on credit. DEFINITION 26 account payable TERM 27 Goods that a business has made or bought and expects to sell in the process of normal operations. DEFINITION 27 inventory TERM 28 Accounting system that records transactions when they occur, regardless of when cash is paid or received. DEFINITION 28 accrual accounting TERM 29 Costs of a long-term or fixed asset spread over its useful life. DEFINITION 29 depreciation expense TERM 30 Balance sheet that totals assets and liabilities in separate categories. DEFINITION 30 classified balance sheet TERM 31 Speed with which an asset can be converted into cash. DEFINITION 31 liquidity TERM 32 Asset that a business intends to convert into cash within a year. DEFINITION 32 current asset TERM 33 Asset that a business intends to hold for more than a year before converting it to cash. DEFINITION 33 long-term asset (or fixed asset) TERM 34 Liability that a business intends to pay off within a year. DEFINITION 34 current liability TERM 35 Liability that a business need not pay off within the following year. DEFINITION 35 long-term liability TERM 46 Financial ratio that helps to assess a firms financial strength. DEFINITION 46 financial condition ratio TERM 47 Financial ratio that shows how efficiently a company turns over its inventory. DEFINITION 47 inventory turnover ratio TERM 48 Financial ratio showing the relationship between a companys current assets and current liabilities. DEFINITION 48 current ratio TERM 49 Financial ratio showing the relationship between debt (funds acquired from creditors) and equity (funds invested by owners). DEFINITION 49 debt-to-equity ratio (or debt ratio) TERM 50 Relationship between a companys debt (funds acquired from creditors) and its equity (funds invested by owners). DEFINITION 50 capital structure TERM 51 Financial ratio showing a companys ability to pay interest on its debts from its operating income. DEFINITION 51 interest coverage ratio TERM 52 Accountant who has met state-certified requirements for serving the general public rather than a single firm. DEFINITION 52 certified public accountant (CPA) TERM 53 Accountants examination of and report on a companys financial statements. DEFINITION 53 audit TERM 54 Accountant who works for a private organization or government agency. DEFINITION 54 private accountant