Key Concepts
Resources a business owns or controls that are expected to provide current and future benefits to the business.
ASSETS
Used by investors, market analysts, and creditors to evaluate a company's financial health and earnings potential.
FINANCIAL STATEMENT
An organization's ideas, goals, and actions.
Planning
A group that sets accounting principles in the United States
G.A.A.P.
The action of stopping something from happening or arising
PREVENTION
Creditors' claims on an organization's assets
LIABILITIES
This is calculated by referring to the balance sheet and income statement during a specific period of time.
STATEMENT OF OWNER'S EQUITY
The resources used to pay for assets.
Financing
An assessment of whether financial statements follow GAAP.
AUDIT
The mechanisms, rules, and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability and prevent fraud
INTERNAL CONTROLS
Individuals hired to review financial reports and information systems.
AUDITORS
A financial statement that reports a company's assets, liabilities and shareholders' equity at a specific point in time
BALANCE SHEET
Acquiring and disposing of assets that an organization uses.
Investing
Amount a business earns in excess of all expenses and costs associated with its sales and revenues.
NET INCOME
A 2002 federal law that established sweeping auditing and financial regulations for public companies
SARBANES-OXLEY ACT
Owner's claim on the assets of business.
EQUITY
A financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources.
Statement of Cash Flows
Using resources to research, develop, purchase, produce, distribute, and market products or services.
OPERATING
Accounting professionals who provide services to many clients.
PUBLIC ACCOUNTANTS
The three factors that push a person to commit fraud: opportunity, pressure, and rationalization.
THE FRAUD TRIANGLE
The "Accounting Equation"
ASSETS = LIABILITIES + EQUITY
One of the major financial statements used by accountants and business owners
Income Statement
Resources loaned by creditors.
NONOWNER FINANCING
Principles that determine wither an action is right or wrong.
ETHICS
A federal law that was enacted on July 21, 2010, protecting consumers against abuses related to credit cards, mortgages, and other financial products.
DODD-FRANK ACT