Accounting Principles Study Guide Resource & Business Basics

Vocabulary flashcards based on essential accounting principles, user categories, standards, and professional credentials.

Financial Resources

Money needed by businesses to get started and operate, provided by investors and creditors.

Investors

Provide financial resources in exchange for ownership interests in businesses, expecting a return of a share of earned income.

Creditors

Lend financial resources to businesses, expecting repayment of borrowed resources plus a specified fee called interest.

Interest

A specified fee paid to creditors in addition to the repayment of borrowed financial resources.

Physical Resources

Natural resources in their primitive form that move through stages of transformation.

Labor Resources

Includes both intellectual and physical labor provided by workers to businesses.

Stakeholders

Resource providers, analysts, brokers, attorneys, regulators, and news reporters.

Users

Individuals or organizations relying on accounting information to evaluate business worthiness.

Financial Accounting

Accounting information provided to external users such as investors and creditors.

Managerial Accounting

Detailed financial and nonfinancial information needed by internal users.

External Users

Stakeholders outside of and separate from the business (e.g., banks, public investors).

Internal Users

Stakeholders who work within a business (e.g., regional managers, executive teams).

Not-for-Profit

Organizations not motivated by profit, such as governments or charitable groups.

GAAP

The standardized rules and practices used by U.S. companies to prepare financial statements.

IASB

Formed to establish a common set of global financial standards.

IFRS

Financial reporting standards issued by the IASB, used by over 120 countries.

Public Accounting

Practice where accountants provide audit, tax, and consulting services to external clients.

CPA

State-licensed public accountant who has met education, exam, and experience requirements.

Audit Services

Examining records to issue an opinion on whether financial statements conform to GAAP.

Tax Services

Determining tax due and planning to legally minimize tax expenses.

Consulting

Activities ranging from installing systems to offering personal financial advice.

Private Accounting

Accountants employed directly by a specific company to perform internal functions.

CMA

Professional certification for internal accountants demonstrating technical competence.

CIA

Professional certification verifying expertise in internal controls and compliance.