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ACC 200 vocab
What are external users?
Users outside the company like investors, stockholders and, creditors
What is the financial accounting standards board (FASB)
A board that oversees the the creation and governance of accounting standards in the United States.
What is managerial accounting?
An area of accounting that focuses on providing information for internal purposes. (decision making)
What is financial accounting?
An area of accounting aimed at serving external users by providing them with general-purpose financial statements.
What are the four general-purpose accounting statements for external users?
Income statement, statement of retained earnings, balance sheet, and statement of cashflows.
Who developed the generally accepted accounting principles?
The FSAB, SEC and IASB.
What is the Securities and Exchange Commission (SEC)?
A government group that establishes reporting requirements for companies that issue stock to the public.
What is the international accounting standards board (ISAB)?
A board that issues international financial reporting standards (IFRS) that identify preferred accounting practices. It wants to create more common practices among different countries, but it doesn’t have the authority to impose its standards on companies.
What are assets?
Resources owned or controlled by a company that are expected to yield future value.
What are liabilities?
Creditors’ claims on assets.
What is owners’ equity?
The owners claim on assets.
What are the two parts of a corporation’s equity? (stockholder equity)
Contributed capital and retained earnings.
What is contributed capital? (Common stock)
The amount that stockholders invest in the company.
What are retained earnings?
Income that isn’t distributed to stockholders.
What are dividends?
The distribution of assets to stockholders which reduces retained earnings.
What is a income statement?
Reports on operating activities by listing amounts for sales, costs, and expenses over a period of time.
What is a statement of retained earnings?
Reports changes in retained earnings of the business over a period of time. Changes result from a net income/loss and dividends.
What is a statement of cashflows?
Reports on cashflows for operating, investing, and financing activities over a period of time.
