Balance Sheet
A financial statement that reports assets, liabilities, and owner's equity on a specific date.
Accounting
Planning, recording, analyzing, and interpreting financial information.
Accounting Equation
An equation showing the relationship among assets, liabilities, and owner's equity.
Transaction
A business activity that changes assets, liabilities, or owner's equity.
Accounting System
A planned process for providing financial information that will be useful to management.
Accounting Balance
The amount in an account.
Capital
The account used to summarize the owner's equity in a business.
Owner's Equity
The amount remaining after the value of all liabilities is subtracted from the value of all assets.
Account
A record summarizing all the information pertaining to a single item in the accounting equation.
Accounting Records
Organized summaries of a business's financial activities.
Asset
Anything of value that is owned.
Proprietorship
A business owned by one person.
Equities
Financial rights to the assets of a business.
Service Business
A business that performs an activity for a fee.
Liabilities
An amount owed by a business.
Account Title
The name given to an account.
Check
A business form ordering a bank to pay cash from a bank account.
Double-Entry Accounting
The recording of debit and credit parts of a transaction.
Entry
Information for each transaction recorded in a journal.
General Amount Column
A journal amount column that is not headed with an account title.
Invoice
A form describing the goods and services sold, the quantity, and the price.
Journal
A form for recording transactions in chronological order.
Journalizing
Recording transactions in a journal.
Memorandum
A form on which a brief message is written describing a transaction.
Proving Cash
Determining that the amount of cash agrees with the accounting records.
Receipt
A business form giving written acknowledgement for cash received.
Sales Invoice
An invoice used as a source document for recording a sale on account.
Source Document
A business paper from which information is obtained for a journal entry.
Special Amount Column
A journal amount column headed with an account title.
Objective Evidence
Preparing source documents for each transaction is an application of the accounting concept.
Bank Statement
A report of deposits, withdraws, and bank balances sent to a depositor by a bank.
Blank Endorsement
An endorsement consisting only of the endorser's signature.
Checking Account
A bank account from which payments can be ordered by a depositor.
Debit Card
A bank card that, when making purchases, automatically deducts the amount of the purchase from the checking account of the cardholder.
Dishonored Check
A check that a bank refuses to pay.
Electronic Funds Transfer (EFT)
A computerized cash payments system that uses electronic impulses to transfer funds.
Endorsement
A signature or stamp on the back of a check transferring ownership.
Petty Cash
An amount of cash kept on hand and used for making small purchases.
Petty Cash Slip
A form showing proof of a petty cash statement.
Postdated Check
A check with a future date.
Restrictive Endorsement
AN endorsement restricting further transfer of a check's ownership.
Special Endorsement
An endorsement indicating a new owner of a check.
Adjustments
Changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period.
Fiscal Period
The length of time for which a business summarizes and reports financial information.
Income Statement
A financial statement showing the revenue and expenses for a fiscal period.
Net Income
The difference between total revenue and total expenses when total revenue is greater.
Net Loss
The difference between total revenue and total expenses when total expenses is greater.
Trial Balance
A proof of the equality of debits and credits in a general ledger.
Work Sheet
A columnar accounting form used to summarize the general ledger information needed to prepare financial statements.
Matching Expenses with Revenue
Recording revenue from business activities and expenses associated with earning that revenue in the same accounting period is an application of the accounting concept.
Accounting Period Cycle
Reporting changes in financial information for a specific period of time in the form of financial statements is an application of the accounting concept.
Consistent Reporting
Following the same accounting procedures in the same way in each accounting period is an application of the accounting concept.
Budget
a detailed plan for the future that is usually expressed in formal quantitative terms
Business Process
A series of steps that are followed in order to carry out some task in a business
Constraint
anything that prevents you from getting more of what you want
Controlling
the process of gathering feedback to ensure that a plan is being properly executed or modified as circumstances change
Corporate Social Responsibility
a concept whereby organizations consider the needs of all stakeholders when making decisions
Decision Making
selecting a course of action from competing alternatives
Enterprise risk management
a process used by a company to identify its risks and develop responses to them that enable it to be reasonably assured of meeting its goals
Financial Accounting
the phase of accounting that is concerned with reporting historical financial information to external parties, such as stockholders, creditors, and regulators
Lean Production
A management approach that organizes resources such as people and machines around the flow of business processes and that only produces units in response to customer orders.
Managerial Accounting
the phase of accounting that is conerned with providing information to managers for use within the organization
Performance Report
A report that compares budgeted data to actual data to highlight instances of excellent and unsatisfactory performance
planning
the process of establishing goals and specifying how to achieve them
segment
a part or activity of an organization about which managers would like cost, revenue, or competitors.
strategy
a company's "game plan" for attracting customers by distinguishing itself from competitors
Theory of Constraints
a management approach that emphasizes the importance of managing constraints
Value Chain
The major business functions that add value to a company's products and services, such as research and development, product design, manufacturing, marketing, distribution, and customer service.
accounting analysis
a method for analyzing cost behavior in which an account is classified as either variable or fixed based on the analyst's prior knowledge of how the cost in the account behaves.
Activity Base
A measure of whatever causes the incurrence of a variable cost.
administrative costs
all executive, organizational, and clerical costs associated with the general management of an organization rather than with manufacturing or selling
