History & Definition
It is the comprehensive process of recording, summarizing, reporting and analyzing of financial transactions pertaining to a business.
What is Accounting?
These are items owned that have monetary value.
What are assets?
Liabilities + Shareholder's Equity
What is Equals Assets?
This accounting principle requires that expenses be matched with revenues.
What is the Matching Principle?
Cash, Accounts Receivable, Accounts Payable, Common Stock, Retained Earnings, etc.
What are permanent accounts?
This refers to a concise summary of financial transactions over an accounting period, summarizing a company's operations, financial position, and cash flows.
What are financial statements?
These are the 2 ways the fundamental accounting equation is stated.
What are 1) Assets = Liabilities + Stockholder's Equity and 2) Assets - Liabilities = Stockholder's Equity?
Common Stock + Retained Earnings
What is Total Stockholder's Equity?
All information that relates to the function of a business’s financial statements must be disclosed in notes accompanying the statements.
What is Full Disclosure?
Sales revenue, Sales returns, Cost of goods sold, Salaries expense, Utilities expense, Rent expense, Depreciation expense, etc.
What are temporary accounts?
He was the first to describe the system of debits and credits in journals and ledgers that is still the basis of today's accounting systems.
Who is Luca Pacioli?
This line on the balance sheet refers to money owed by a company.
What is Accounts Payable?
Current Assets + Non-current Assets
What is Total Assets?
Revenues are recognized as soon as product has been sold or service has been performed, regardless of when the money is actually received.
What is Revenue Recognition?
System used to analyze and record a transaction.
What is double-entry accounting?
This was enacted to provide guidelines, restrictions to accountants and their engagements, and to businesses and their policies procedures.
What is the Sarbanes-Oxley Act (SOX) of 2002?
This is the difference between total assets and total liabilities.
What is Stockholder's Equity?
Total Liabilities - Non-current Liabilities
What is Current Liabilities?
This is the concept that you should record a transaction in the accounting records if not doing so might have altered the decision making process of someone reading the company's financial statements.
What is Materiality?
Property or items of value owned by a business.
What is assets?
Year the system Double-entry bookkeeping was introduced and described in Summa de Arithmetica, Geometria, Proportioni et Proportionalita.
What is 1494?
The term used to explain how quickly a company can convert assets into cash.
What is liquidity?
Assets - Liabilities
What is Stockholder's Equity?
When preparing financial statements, the assumption that a company will continue to exist long enough to carry out its objectives and commitments and will not liquidate in the foreseeable future.
What is Going Concern?
Is a list of all accounts used by a business.
What is chart of accounts?