Accounting Terms
The systematic process of recording and reporting the financial position of a person or an organization.
What is accounting?
What is an income statement?
Cash, equipment, buildings, supplies, inventory and land.
What are examples of business assets?
A set of documents that outline the essential financial facts about a new venture.
What is a financial plan?
A plan specifying how money will be used or spent during a particular period.
What is a budget?
The same set of rules all accountants use.
What is GAAP, generally accepted accounting principles?
A report of the balances in all assets, liability and owner's equity accounts at the end of an accounting period.
What is a balance sheet?
Costs of business assets, remodeling costs, security deposits, advertising, insurance, supplies and legal permits and licenses.
What are examples of start-up expenses?
Identifying the assets to be purchased, describing teh amount of money needed to start and operate, describing the expenses and how they will be covered, describing how the business will report records, forecasting future profitability and explaining how money will be acquired for growth or expansion.
What are the parts of an effective business plan?
A start-up budget, a cash budget, and an operating budget.
What are the three main types of budgets?
Property and other items of value owned by a business.
What are assets?
A financial report that shows incoming and outgoing money during an accounting period.
What is the statement of cash flows?
Cash, supplies, merchandise, and accounts receivable.
What are examples of current assets?
An estimate of a business's financial outlook for each of the next few years.
What is a financial forecast?
Anything of value that is owned or controlled.
What is property?
The total amount of money owed to a business.
Most companies use this to simplify their accounting procedures.
What is computerized accounting?
Equipment, buildings and any asset held longer than 12 months.
What are examples of fixed assets?
Money supplied by investors, banks or owners of a business.
What is capital?
The present value of an asset less all claims against it.
What is equity?
The debts of a company, or the creditor's claims to the assets of the business.
What are liabilities?
Assets = Liabilities + Owner's Equity
What is the accounting equation?
Balance Sheet, Income Statement and Statement of Cash Flow.
What are examples of financial reports?
The part of the plan that describes any legal agreements, the way records are kept, who is maintaining the accounting records and the type of software being used?
What is financial records management?
An owner's claim to the assets of the business, measured by the dollar amount of the owner's claims to the total assets of the business.
What is owner's equity?