Accounting Terms and Definitions, Quizzes of Introduction to Business Management

Download Accounting Terms and Definitions and more Quizzes Introduction to Business Management in PDF only on Docsity! TERM 1 Accounting DEFINITION 1 The recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested parties the information they need to make good decisions. TERM 2 Accounting cycle DEFINITION 2 A six-step procedure that results in the preparation and analysis of the major financial statements. TERM 3 Accounts payable DEFINITION 3 Current liabilities are bills the company owes to others for merchandise or services purchased on credit but not yet paid for. TERM 4 Annual report DEFINITION 4 A yearly statement of the financial condition, progress, and expectations of an organization. TERM 5 Assets DEFINITION 5 Economic resources (things of value) owned by a firm. TERM 6 Auditing DEFINITION 6 The job of reviewing and evaluating the information used to prepare a company's financial statements. TERM 7 Balance sheet DEFINITION 7 Financial statement that reports a firm's financial condition at a specific time and is composed of three major accounts: assets, liabilities, and owners' equity. TERM 8 Bonds payable DEFINITION 8 Long-term liabilities that represent money lent to the firm that must be paid back. TERM 9 Bookkeeping DEFINITION 9 The recording of business transactions. TERM 10 Cash flow DEFINITION 10 The difference between cash coming in and cash coming out of a business. TERM 21 Fundamental accounting equation DEFINITION 21 Assets=Liabilites+Owner's Equity; This is the basis for the balance sheet. TERM 22 Government and not-for-profit accounting DEFINITION 22 Accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duly approved budget. TERM 23 Gross profit (gross margin) DEFINITION 23 How much a firm earned by buying (or making) and selling merchandise. TERM 24 Income statement DEFINITION 24 The financial statement that shows a firm's profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm, ad the resulting net income. TERM 25 Independent audit DEFINITION 25 An evaluation and unbiased opinion about the accuracy of a company's financial statements. TERM 26 Intangible assets DEFINITION 26 Long-term assets (e.g. patents, trademarks, copyrights) that have no real physical form but do have value. TERM 27 Journal DEFINITION 27 The record book or computer program where accounting data are first entered. TERM 28 Ledger DEFINITION 28 A specialized accounting book or computer program in which information from accounting journals is accumulated into specific categories and posted so that managers can find all the information about one account in the same place. TERM 29 Liabilities DEFINITION 29 What the business owes to others (debts). TERM 30 Liquidity DEFINITION 30 The ease with which an asset can be converted into cash. TERM 31 Managerial accounting DEFINITION 31 Accounting used to provide information and analyses to managers inside the organization to assist them in decision making. TERM 32 Net income or net loss DEFINITION 32 Revenue left over after all costs and expenses, including taxes, are paid. TERM 33 Notes payable DEFINITION 33 Short-term or long-term liabilities that a business promises to repay by a certain date. TERM 34 Operating expenses DEFINITION 34 Costs involved in operating a business, such as rent, utilities, and salaries. TERM 35 Owners equity DEFINITION 35 The amount of the business that belongs to the owners minus any liabilities owed by the business.Think VALUE