Environment and Theoretical Structure of Financial Accounting

A collection of vocabulary flashcards related to the environment and theoretical structure of financial accounting concepts.

Financial Accounting

The field of accounting that provides financial information to external users such as investors and creditors.

GAAP

Generally Accepted Accounting Principles; a dynamic set of broad and specific guidelines for measuring and reporting financial information.

Accrual Basis Accounting

A method of accounting that measures revenues and expenses regardless of when cash is received or paid.

Cash Basis Accounting

A method of accounting that only recognizes cash receipts and cash payments related to transactions.

Rate of Return

The gain or loss made on an investment relative to the amount invested, usually expressed as a percentage.

Financial Statements

Structured records that outline the financial activities and position of a business.

Conceptual Framework

A system of interrelated objectives and fundamentals that provides a foundation for financial accounting and reporting standards.

Environmental, Social, and Governance (ESG) Standards

A set of criteria used to evaluate a company's operations and its impact on society.

Fair Value

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction.

Expense Recognition

The accounting principle that dictates how and when expenses should be recorded, generally matching them with revenues.