Accounting basics
An individual who has had specialized training in accounting procedures
what is accountant
Anything of value that a business owns
what is Assets
A financial statement that captures the financial condition of the business at that particular moment
what is Balance sheet
A method of accounting that records transactions at the time they occur even if no money changes hands at the time
what is Accrual accounting method
A special book or computer program in which a business’s transactions are recorded in the order in which they occur
what is Journal
The process of keeping financial records
what is Accounting
Debts that the business owes
what is Liabilities
A financial summary that shows how much money the business has made or has lost; also called the profit-and-loss statement
what is Income statement
An accounting method in which income and expenditures are recorded at the time the money changes hands
what is Cash accounting method
The accounting record for a specific department or area of the business
what is Ledger
A process or series of steps that businesses complete to maintain their financial records effectively
what is Accounting cycle
Currency and coins
what is Cash
A financial summary with estimates as to when, where, and how much money will flow into and out of a business
what is Cash flow statement
The steps of the accounting cycle that involve recording each business transaction; the process of analyzing financial transactions, journalizing transactions, posting to ledgers, and balancing the books
what is Bookkeeping
A business activity such as a sale, a purchase, or a return
what is Transaction
Rules that accountants must follow when preparing financial statements
what is Accounting standards
Money received by a business or an individual from outside sources
what is Income
A summary of accounting information
what is Financial statement
The listing of a business’s different accounts and their current balances; used to check the accuracy of journal and ledger entries
what is Trial balance
Those who invest their funds in a business; may be owners or stockholders
what is Investors
The methods and procedures used in consistently handling the business’s financial information
what is Accounting system
The amount an owner has invested in the business plus or minus profits and losses
what is Owner's equity
The total value of the business
what is Net worth
The monies that a business spends; also called expenditures
what is Expenses
A type of accounting that involves preparing and reporting financial data to internal users, usually managers, who need financial information to control day-to-day operations and to make financial decisions and plans affecting the business
Managerial accounting