Accounting Terms

Managerial Accounting

An area of accounting concerned with reporting results to managers and others who are internal to an organization. (no set rules).

Liabilities

Amounts owed by an entity to creditors.

Accounting

A set of concepts and techniques that are used to measure and report financial information about an economic unit.

Financial Accounting Standards Board (FASB)

An organization charged with producing standards for financial reporting in the U.S.A.

Retained Earnings

The excess of a corporation’s income over it’s dividends.

(C) Certified (P) Public (A) Accountant

An individual who is licensed by a state to practice public accounting.

Financial Claims

A legal or contractual right held by a creditor or owner to receive a future cash from a business.

Income Statement

A financial statement that summarizes the revenues, expenses, and results of operations for a specified period of time (Revenue-Expense=Profit/Loss).

Accounts Receivable

The amount of money owned to a business by it’s customers.

Drawing

Any asset taken out of the business by the owner for personal use.

Expenses

The costs incurred in producing revenues.

Internal Auditor

A person within an organization who reviews and monitors the controls, procedures, and information of the organization.

Sole Proprietorship

A non-corporation business owned by a sole individual.

Corporation

A form of business organization where ownership is represented by shares of stocks