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100
System for collecting, analyzing and communicating financial information
What is accounting?
100
Field of accounting concerned with external users of a company's financial information
What is financial accounting?
100
Field of accounting that serves internal users of a company's financial information
What is managerial accounting?
100
Systematic examination of a company's accounting system
What is an audit?
100
Accounting guidelines that govern the content and form of financial reports
What is generally accepted accounting principles (GAAP)?
200
Salaried accountant hired by a business to carry out its day-to-day financial activities
What is a private accountant?
200
An accountant licensed by the state and offering services to the public
What is a certified public accountant (CPA)?
200
Any economic resource expected to benefit the firm or individual who owns it
What is an asset?
200
Debt owed by a firm to an outside organization or individual
What is a liability?
200
Amount of money that owners would receive if they sold all of a firm's assets and paid all of its liabilities
What is owners' equity?
300
Financial statement that supplies detailed information about a firm's assets, liabilities, and owners' equity
What is the balance sheet?
300
The ease with which an asset can be converted into cash
What is liquidity?
300
An asset with long-term use or value
What is a fixed asset?
300
Accounting method to spread cost of an asset over the years of its useful life
What is depreciation?
300
Financial statement that lists a firm's annual revenues and expenses to determine if the firm has made a profit or loss
What is the income statement?
400
The costs of obtaining materials for making the products sold by a firm during the year
What is the cost of goods sold?
400
Gross profit minus operating expenses
What is operating income?
400
Gross profit minus operating expenses and taxes
What is net income (or net profit or net earnings)?
400
Financial statement that describes a firm's cash receipts and payments from operations, investing, and financing
What is the statement of cash flows?
400
Detailed statement of estimated receipts and expenditures for a future period of time
What is a budget?
500
The ability to finance an investment through borrowed funds
What is leverage?
500
Formal recording and reporting of revenues at the appropriate time
What is revenue recognition?
500
Financial ratio for measuring a company's ability to pay immediate debts
What is the short-term solvency ratio?
500
Financial ratio for measuring a firm's potential earnings
What is a profitability ratio?
500
Assets = Liabilities + Owners' Equity
What is the accounting equation?
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