Vocab
What is the definition of accounting?
The process of recording, classifying, summarizing, and interpreting financial information.
A single individual owns and operates a business and is personally liable for all of its debts. This describes a:
Sole Proprietorship.
This term describes the unwritten rules of polite, respectful behavior when communicating online
Netiquette
This term describes the moral principles that guide a person's or organization's behavior. In accounting this means that accountants remain impartial and free from conflicts of interest when reporting financial information
Ethics
What does GAAP stand for?
Generally Accepted Accounting Principles
A business that buys finished goods and resells them to customers without changing their form is classified as a:
Merchandising business
A __ is a business owned by two or more people who share in its profits, losses, and management
Partnership
This U.S. legal doctrine allows limited use of copyrighted material without permission for things like commentary, criticism, or education.
Fair Use
This term describes an employee who reveals an organization's wrongdoing, often to the public or authorities.
A whistleblower
This US Federal Agency requires publicly traded companies to follow GAAP.
SEC (Securities and Exchange Commission)
What principle requires that revenue be recorded when it is earned, regardless of when the cash is obtained?
Revenue Recognition Principle
A business structure designed to combine the tax advantages of a partnership with the operating advantages of a corporations
Limited Liability Corporation
This term describes repeated, intentional harassment of someone through digital devices or platforms.
Cyber Bullying
This group of people rely on ethical reporting of financial statements.
Investors
This independent board writes and updates GAAP Standards.
FASB (Financial Accounting Standards Board)
Requires that the financial records of a business be kept separate from the personal financial records of its owner(s)
Business Entity Concepts
This business structure is a separate legal entity from its owners, offering the strongest liability protection but facing potential double taxation.
Corporation
A word, phrase, symbol, or design that legally identifies the source of a product or service and separates it from competitors.
Trademark
An accountant discovers an error that understates a company's expenses, which would make the company appear more profitable than it really is. According to professional accounting ethics, the accountant should:
Correct the error and report the information accurately, even though it lowers reported profit
This GAAP Principle assumes a company will have the money to continue to run for 12 months.
Continuity - Going Concern
Focuses on reporting information to external users—those not directly involved in the day-to-day operations of the business. (i.e. banks, investors, governmental taxing agencies, competitors)
Financial Accounting
Which business structures have lower tax implications?
Sole Propietorships, Partnerships, and LLC's
Fair Use laws and creative commons licenses are two ways to get around what law?
Copyright Infringement
Ethical behavior in accounting includes maintaining the confidentiality of an employer's or client's financial information unless the accountant is legally required to disclose it.
True
Unlike GAAP, this international accounting standard is used in 140+ countries and is more principles-based.
IFRS