Financial Accounting Fundamentals Flashcards

Vocabulary flashcards covering core accounting topics such as net income reporting, limited liability, GAAP compliance auditing, relevance characteristics, and market impacts.

Net Income Reporting

The reporting of net income (or net loss) on both the income statement and statement of stockholders' equity.

Limited Liability

A characteristic of a corporation where stockholders are not obligated to pay the corporation's debts out of their own pocket.

Independent Auditor Opinion

An opinion expressed by independent auditors regarding the extent to which financial statements are in compliance with GAAP.

Relevance (Accounting Information)

A characteristic requiring accounting information to possess both predictive value and confirmatory value.

Net Income

The financial accounting number that, on average, has the single greatest impact on stock prices.