COB 241 Chapter 1

Flashcard #1
Term: Accounting
Definition: The practice of providing information to stakeholders regarding the economic performance and well-being of a business.

Flashcard #2
Term: Stakeholder
Definition: A person or entity with an interest in the economic performance and well-being of a business.

Flashcard #3
Term: Financial Accounting
Definition: Provides information to external stakeholders such as resource providers, government agencies, analysts, and media.

Flashcard #4
Term: Managerial Accounting
Definition: Provides information to internal stakeholders like managers and employees.

Flashcard #5
Term: FASB
Definition: The Financial Accounting Standards Board; sets measurement and reporting rules in the U.S.

Flashcard #6
Term: GAAP
Definition: Generally Accepted Accounting Principles; the U.S. measurement rules for accounting.

Flashcard #7
Term: IFRS
Definition: International Financial Reporting Standards; rules used by most countries for accounting.

Flashcard #8
Term: Asset
Definition: Resources acquired by a business and used to make money.

Flashcard #9
Term: Liability
Definition: Obligations a business owes to creditors, such as debts.

Flashcard #10
Term: Interest
Definition: A fee charged by creditors when money is borrowed.

Flashcard #11
Term: Common Stock
Definition: Certificates showing investor contributions to a business, representing ownership.

Flashcard #12
Term: Stockholders' Equity
Definition: The business's commitment to stockholders; owners' claim on assets.

Flashcard #13
Term: Dividends
Definition: Distributions of earnings to shareholders, not considered an expense.

Flashcard #14
Term: Revenue
Definition: The economic benefit earned from providing goods or services to customers.

Flashcard #15
Term: Expense
Definition: Economic sacrifices incurred to generate revenue.

Flashcard #16
Term: Net Income
Definition: Revenues minus expenses; represents the profit.

Flashcard #17
Term: Retained Earnings
Definition: Profits kept in the company after dividends are paid, used for growth and emergencies.

Flashcard #18
Term: Double-entry Bookkeeping
Definition: A method where every transaction affects the accounting equation in at least two places.

Flashcard #19
Term: Accounting Equation
Definition: Assets = Liabilities + Stockholders’ Equity.

Flashcard #20
Term: General Ledger
Definition: The complete collection of a company’s accounts.

Flashcard #21
Term: Income Statement
Definition: A financial statement that shows revenues minus expenses to calculate net income over a period.

Flashcard #22
Term: Statement of Changes in Equity
Definition: Shows changes in equity from common stock and retained earnings.

Flashcard #23
Term: Balance Sheet
Definition: A financial statement that shows assets, liabilities, and equity at a specific point in time (a snapshot).

Flashcard #24
Term: Statement of Cash Flows
Definition: Shows inflows and outflows of cash during a period.

Flashcard #25
Term: Financing Activities
Definition: Cash transactions with owners or creditors such as issuing stock, borrowing, or paying dividends.

Flashcard #26
Term: Investing Activities
Definition: Cash transactions involving long-term assets like buying or selling land, equipment, and buildings.

Flashcard #27
Term: Operating Activities
Definition: Day-to-day transactions such as paying expenses, collecting revenue, or interest.

Flashcard #28
Term: Examples of stakeholders
Definition: Creditors, investors, government regulators, analysts, attorneys, media, management, employees.

Flashcard #29
Term: Examples of assets
Definition: Cash, land, equipment, inventory.

Flashcard #30
Term: Ways assets can increase
Definition: By increasing liabilities, increasing equity, or decreasing another asset.

Flashcard #31
Term: Ways assets can decrease
Definition: By decreasing liabilities, decreasing equity, or increasing another asset.

Flashcard #32
Term: The four main financial statements
Definition: Income Statement, Statement of Changes in Equity, Balance Sheet, Statement of Cash Flows.

Flashcard #33
Term: Classify: Earned 300,000300,000 revenue.
Definition: Operating

Flashcard #34
Term: Classify: Sold a warehouse for 85,00085,000.
Definition: Investing

Flashcard #35
Term: Classify: Borrowed 50,00050,000 from the bank.
Definition: Financing

Flashcard #36
Term: Classify: Paid 10,00010,000 dividends.
Definition: Financing

Flashcard #37
Term: Classify: Paid 45,00045,000 salaries.
Definition: Operating

Flashcard #38
Term: Classify: Repaid 25,00025,000 bank loan.
Definition: Financing

Flashcard #39
Term: Classify: Bought 70,00070,000 equipment.
Definition: Investing

Flashcard #40
Term: Classify: Received 100,000100,000 from issuing stock.
Definition: Financing