FULL FINACC REVIEW NOTES

Bookkeeping

The preservation of a systematic, quantitative record of an activity.

Business

An entity operated to make a profit for its owners.

Nonprofit organization

An organization that provides services in an effective and efficient manner.

Accounting Cycle

A standard set of procedures that involve analyzing, recording, classifying, summarizing, and reporting the transactions of a business.

Decision-Making Process

A series of steps including: identify the issue, gather information, identify alternatives, and select the most suitable option.

Capital/Financing

Resources required by a business to pursue its objectives, often represented by money.

Managerial Accounting

Focuses on information needed for planning, implementing plans, and controlling within an organization.

Accounts Payable

Refers to the amount of money owed to vendors.

Financial Accounting

Gathering, reporting, and analyzing information primarily for the benefit of external users such as investors and creditors.

Balance Sheet

A financial statement that lists resources (assets) and obligations (liabilities) at a specific point in time.

Income Statement

A financial statement that shows how much profit was made over a period of time.

Statement of Cash Flows

A financial statement that details the flow of cash in and out over a period of time.

Ethics

Basic moral principles that govern an individual’s behavior, particularly in a business context.

FASB (Financial Accounting Standards Board)

A private group that establishes GAAP in the United States through a public process without legal authority.

GASB (Governmental Accounting Standards Board)

Sets accounting and financial reporting standards for state and local governments following GAAP.

SEC (Securities and Exchange Commission)

The legal authority that regulates financial markets and accounting in the U.S.

AICPA (American Institute of Certified Public Accountants)

Professional association of certified public accountants (CPAs).

IRS (Internal Revenue Service)

U.S. government agency responsible for collecting and regulating income taxes.

IASB (International Accounting Standards Board)

Establishes global accounting standards, similar to FASB, but for countries outside of the U.S.