Accounting Information Systems and Business Principles

Vocabulary flashcards covering Accounting Information Systems, special journals, subsidiary ledgers, business entity types, system principles, and data processing techniques based on the provided material.

Accounting Information Systems

Systems that collect and process data from transactions and events, organize them in reports, and communicate results to decision makers.

Bookkeeping

The part of the accounting process that involves logging and keeping records of transactions within the accounting system.

Internal Users

Users of financial information inside an organization, including Management, HR, Finance, and Marketing.

External Users

Users of financial information outside an organization, including customers, banks, SEC, IRS, investors, and labor unions.

Ethics

Standards and workplace behaviors based on beliefs about what is good and bad, or right and wrong.

Income Statement

A financial statement where revenues, expenses, and net gains or losses are recorded.

Owner's Equity

The capital belonging to the owner, reflecting when and why capital increases or decreases.

Balance Sheet

A financial statement based on the core accounting equation: $\text{Assets} = \text{Liabilities} + \text{Equity}$.

Sole Proprietorship

A business owned by one person featuring unlimited liability, no limited life, and no corporate-level tax.

Partnership

A business owned by two or more people with unlimited liability and no limited life.

Corporation

A business entity that can be owned by one or more owners, provides limited liability, has continuous life, and pays corporate taxes.

LLC (Limited Liability Company)

A business structure offering corporate liability protection while being taxed like an individual owner/proprietorship.

General Ledger

A comprehensive collection of records containing all financial transactions organized by account.

Unadjusted Trial Balance

A summary listing of accounts and their balances created before making adjusting entries, more summarized than the general ledger.

Control Principle

An accounting system principle requiring secure data recording (e.g., cloud tracking) that logs transaction creators and prevents unauthorized deletion.

Relevance Principle

An accounting system principle requiring the system to provide important information necessary for analysis and decision-making.

Compatibility Principle

An accounting system principle requiring alignment with the specific sales, service, and operational needs of the business.

Flexibility Principle

An accounting system principle expecting the system to adjust and adapt over time as the business changes.

Cost-Benefit Principle

An accounting system principle specifying that system benefits must outweigh its costs while remaining functional for the company's budget.

Subsidiary Ledgers

Listings of individual detailed accounts with common characteristics linked to a controlling account.

Accounts Receivable Ledger

A subsidiary ledger detailing individual customer balances and amounts owed from credit sales.

Accounts Payable Ledger

A subsidiary ledger detailing individual amounts owed to specific creditors and suppliers.

Controlling Account

A general ledger account whose balance equals the total sum of balances in its related subsidiary ledger.

Schedule of Accounts Receivable

A report listing each customer and their balance owed, used to prove the Accounts Receivable controlling account balance.

Schedule of Accounts Payable

A report listing each supplier and the balance owed to them, used to prove the Accounts Payable controlling account balance.

Sales Journal

A special journal used to journalize and post credit sales transactions.

Cash Receipts Journal

A special journal used to record incoming cash from credit customers, cash sales, and other cash sources.

Purchases Journal

A special journal used to journalize and post credit purchase transactions.

Cash Payments Journal

A special journal used to journalize and post cash payments and disbursements.

Integrated Software

Accounting software where actions taken in one area automatically update all related components across the system.

Online Processing

A data processing method where transaction data is entered and processed immediately into the system.

Batch Processing

A data processing method that accumulates transaction information over time and processes it all at once on a scheduled basis.

Computer Networks

Links among computers that provide users access to shared databases and applications.

Enterprise Resource Planning (ERP)

Customizable, integrated software programs such as SAP or Oracle designed to manage key operational activities across a company.

Data Analytics

The process of analyzing data to identify meaningful relations and trends, aiding staff in data-driven decision-making.

Data Visualization

The graphical presentation of data to help people understand its significance and assist key decision makers.

Cloud Computing

The delivery of computing as a web service rather than a product installed on an individual local computer.