Vocab Pt. 1
The process of recording, maintaining, and reporting an organization’s financial transactions and records.
Accounting
Also referred to as external accounting, refers to a business that works with their clients to help prepare reports and review (audit) financial information for accuracy and completeness before it is shared publicly.
Public Accounting
An accounting method that states revenues and expenses are recognized and recorded at the time they are earned or incurred, even if money doesn’t change hands.
Accrual Accounting Method
Expenses incurred to provide a product or service should be recorded (or matched) at the same time the related revenue for the sale of that product or service is recorded.
Matching Principle
Controller
Financial
Focuses on the management of the assets, liabilities, and cash flow of an organization, financial analysis like ROI and ROE, and financial planning of future growth.
Finance
Also referred to as internal accounting, this refers to a role inside a company that helps record transactions and prepare/analyze financial statements and reports, in order to inform company decision-making.
Private Accounting
An accounting method that states revenues and expenses are recognized and recorded when cash actually changes hands.
Cash Accounting Method
Every purchase should be recorded based on its actual acquisition cost (or price).
Cost Principle
Stock Trader
Accounting-Related
The value of a company, calculated by multiplying the number of outstanding shares by the current stock price.
Market Capitalization
Someone within a company that uses financial information to inform company decision making.
Internal User
An independent, non-profit organization that establishes financial reporting standards through GAAP.
Financial Accounting Standards Board (FASB)
A company will not dissolve or go bankrupt, and is therefore able to meet its financial obligations and objectives in the future.
Going Concern Assumption
Tax Planning
Taxation
Someone outside of a company that has limited access to accounting information.
External User
The function of accounting that helps an organization make well-informed decisions through the measurement, analysis, and communication of accounting information.
Managerial Accounting
The government regulatory agency responsible for policing the US financial markets.
Securities and Exchange Commision (SEC)
Financial statements are to be based on solid evidence and should be free and clear of management’s personal opinions and biases.
Objectivity Principle
Chief Marketing Officer
Not-accounting related
The function of accounting that involves preparing financial statements and reports for external users.
Financial Accounting
The system of accounting used by governments and non-profit organizations to group resources into specific funds so they know what resources are available to complete a specific purpose or task.
Fund Accounting
A law created in 2002 that helped restore confidence in the financial markets by cracking down on accounting errors and protecting investors from fraudulent accounting and financial reporting practices.
Sarbanes-Oxley Act (SOX)
The same accounting methods are consistently used across accounting periods.
Consistency assumption
Staff accountant
Managerial