Accounting and Financial Statements

These flashcards cover key terms and concepts from the lecture regarding accounting and financial statements.

Accounting

The recording, measurement, and interpretation of financial information.

Certified Public Accountant (CPA)

An individual certified by the state to provide accounting services, including the preparation of financial records and tax returns.

Forensic Accounting

Accounting fitting for legal review, involving analysis of financial documents for fraud.

Managerial Accounting

The internal use of accounting statements by managers for planning and directing activities.

Budget

An internal financial plan forecasting expenses and income over a set period.

Double-Entry Bookkeeping

A system recording and classifying transactions to maintain the accounting equation balance.

Financial Statement

A formal record of the financial activities of a business, including income statements and balance sheets.

Income Statement

A financial report showing an organization's profitability over a period.

Balance Sheet

A snapshot of an organization’s financial position at a given moment, indicating its assets, liabilities, and owners' equity.

Cash Flow

The movement of money through an organization over a given period.

Ratio Analysis

Calculations measuring an organization's financial health by evaluating relationships between different financial metrics.

Profit Margin

A profitability ratio calculated as net income divided by sales, indicating the percentage of revenue that exceeds costs.

Current Ratio

A liquidity ratio measuring a company's ability to pay short-term obligations, calculated as current assets divided by current liabilities.

Return on Equity (ROE)

A financial ratio indicating profitability by revealing how much profit a company generates with the money shareholders have invested.