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Accounting: What the Numbers Mean- Chapter 1 Vocabulary
Accounting- Present and Past
33
Accounting
Graduate
01/25/2012

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Term
accounting
Definition
The process of identifying, measuring, and communicating economic information about an organization for the purpose of making decisions and informed judgments.
Term
accrual accounting
Definition
Accounting that recognizes revenues and expenses as they occur, even though the cash receipt from the revenue or the cash disbursement related to the expense may occur before or after the event that causes revenue or expense recognition.
Term
annual report
Definition
A document distributed to shareholders and other interested parties that contains the financial statements, explanatory notes, and management's discussion and analysis of financial and operating factors that affected the firm together with the report of the external auditor's examination of the financial statements.
Term
auditing
Definition
The process of examining the financial statements of an entity by an independent third party with the objective of expressing an opinion about the fairness of the presentation of the entity's financial position, results of operations, changes in financial position, and cash flows. The practice of auditing is less precisely referred to as public accounting.
Term
bookkeeping
Definition
Procedures that are used to keep track of financial transactions and accumulate the results of an entity's financial activities.
Term
cash flow
Definition
Cash receipts or disbursements of an entity.
Term
Certified Management Accountant (CMA)
Definition
Professional designation earned by passing a broad, four-part examination and meeting certain experience requirements. Examination topics include economics, corporate finance, information management, financial accounting and reporting, management reporting, decision analysis, and behavioral issues.
Term
Certified Public Accountant (CPA)
Definition
A professional designation earned by fulfilling certain education and experience requirements, in addition to passing a comprehensive, four-part examination. Examination topics include financial accounting theory and practice, income tax accounting, managerial accounting, governmental and not-for-profit accounting, auditing, business law, and other aspects of the business environment.
Term
controller
Definition
The job title of the person who is the chief accounting officer of an organization. The controller is usually responsible for both the financial and managerial accounting functions. Sometimes referred to as comptroller.
Term
cost accounting
Definition
A subset of managerial accounting that relates to the determination and accumulation of product, process, or service costs.
Term
Cost Accounting Standards Board (CASB)
Definition
A group authorized by the U.S. Congress to Establish cost accounting standards for government contractors.
Term
creditor
Definition
An organization or individual who lends to the entity. Examples include suppliers who ship merchandise to the entity prior to receiving payment for their goods and banks that lend cash to the entity.
Term
entity
Definition
An organization, individual, or a group of organizations or individuals for which accounting services are performed.
Term
financial accounting
Definition
Accounting that focuses on reporting an entity's financial position at a point in time and/or it's results of operations and cash flows for a period of time.
Term
Financial Accounting Foundation (FAF)
Definition
An organization composed of people from the public accounting profession, businesses, and the public that is responsible for the funding of and appointing members to the Financial Accounting Standards Board and the Governmental Accounting Standards Board.
Term
Financial Accounting Standards Board (FASB)
Definition
The body responsible for establishing generally accepted accounting principles.
Term
generally accepted accounting principles (GAAP)
Definition
Pronouncements of the Financial Accounting Standards Board (FASB) and its predecessors that constitute appropriate accounting for various transactions used for reporting financial position and results of operations to investors and creditors.
Term
generally accepted auditing standards (GAAS)
Definition
Standards for auditing that are established by the Auditing Standards Board of the American Institute of Certified Public Accountants unless superseded or amended by the PCAOB.
Term
Governmental Accounting Standards Board (GASB)
Definition
Established by the Financial Accounting Foundation to develop guidelines for financial accounting and reporting by state and local government units.
Term
independence
Definition
The personal characteristic of an accountant, especially an auditor, that refers to both appearing and in fact being objective and impartial.
Term
independent auditor's report
Definition
The report accompanying audited financial statements that explains briefly the auditor's responsibility and the extent of work performed. The report includes an opinion about whether the information contained in the financial statements is presented fairly in accordance with generally accepted accounting principles.
Term
integrity
Definition
The personal characteristic of honesty, including being forthright in dealings and communications with others.
Term
internal auditing
Definition
The practice of auditing within a company by employees of a company.
Term
International Accounting Standards Board (IASB)
Definition
Standard-setting body responsible for the development of International Financial Reporting Standards (IFRS), permitted or required by more than 100 countries.
Term
International financial reporting standards (IFRS)
Definition
Pronouncements of the International Accounting Standards Board that are considered to be a "principles-based" set of standards in that they establish broad rules as well as dictating specific treatments. Many of the standards forming part of IFRS are known by the older name of International Accounting Standards.
Term
investor
Definition
An organization or individual that has an ownership interest in the firm. For corporations, referred to as stockholder or shareholder.
Term
managerial accounting
Definition
Accounting that is concerned with the internal use of economic and financial information to plan and control many of the activities of an entity and to support the management decision-making process.
Term
objectivity
Definition
Personal characteristic of impartiality, including freedom from conflict of interest.
Term
public accounting
Definition
The segment of the accounting profession that provides income tax accounting, and management consulting services to clients.
Term
Public Company Accounting Oversight Board (PCAOB)
Definition
Established in 2002 with authority to set and enforce auditing and ethics standards for public companies and their auditing firms, affiliated with the SEC.
Term
Securities and Exchange Commission (SEC)
Definition
A unit of the federal government that is responsible for establishing regulations and assuring full disclosure to investors about companies and their securities that are traded in interstate commerce.
Term
Statements of Financial Accounting Standards (SFAS)
Definition
Pronouncements of the Financial Accounting Standards Board that constitute generally accepted accounting principles.
Term
integrity
Definition
The personal characteristic of honesty, including being forthright in dealings and communications with others.
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