Accounting: Chapter One

A group of people or entities organized to buy and sell resources

Value added by transforming resources into products or services desired by customers

Increase in value created by providing goods and services through resource transformation

The difference between revenues and expenses

Money or credit supplied to a business by investors and creditors

Provide financial resources in exchange for ownership interests in businesses

Lend financial resources to businesses

Parties interested in the operations of a business, including owners, lenders, employees, suppliers, customers, and government agencies

Individuals or organizations that use financial information for decision making

Branch of accounting focused on the business information needs of external users

Branch of accounting focused on the internal information needs of managers and others working within the business

Organizations established primarily for motives other than making a profit, such as providing goods and services for the social good

Businesses or other organizations for which financial statements are prepared

Record of summarized transaction data and a component of financial statement elements

Economic resource used to produce revenue that is expected to provide a future benefit to the business

Obligations of a business to relinquish assets, provide services, or accept other obligations

Basic class of corporate stock that has no preferential claim on assets or dividends

Owners of a corporation

The interest in a corporation’s assets that is owned by the stockholders

Portion of stockholders’ equity that includes all earnings retained in the business since inception

Owners’ and creditors’ interests in a business’s assets

Algebraic relationship between a company’s assets and the claims on those assets

Economic occurrence that changes a company’s assets, liabilities, or equity

Business event that involves transferring something of value between two entities

A transaction that increases both an asset and a claim on assets

A transaction, such as the purchase of land with cash, that decreases one asset and increases another asset

A transaction that decreases both an asset and a claim on assets

A transaction that increases creditors' claims and decreases a shareholders' claim, or vice versa

The economic benefit gained by providing goods or services to customers

An economic sacrifice that is incurred in the process of generating revenue

Transfer of wealth from a business to its owners

The set of all accounts used in a given accounting system, typically organized in financial statement order

Accounting practice of reporting assets at the actual price paid for them when purchased regardless of estimated changes in market value

Process of dividing up an organization’s assets and returning them to the resource providers

Refers to a business’s duty to protect and use the assets of the company for the benefit of the owners

Financial report of profitability

Time span covered by the financial statements

Statement that summarizes the transactions that affected the owners’ equity during the accounting period

Statement that shows how much earnings a company has accumulated and kept in the company since inception

Financial statement that reports a company’s assets and the corresponding claims on those assets as of a specific date

Ability to convert assets to cash quickly and meet short-term obligations

The financial statement that reports a company’s cash inflows and outflows for an accounting period

Characteristic of financial statements that means they are interrelated

Accounts used to collect retained earnings data applicable to only the current accounting period

Balance sheet accounts that contain information carried forward from one accounting period to the next

Representation of several financial statements horizontally across a page

A document companies publish to provide information, including financial statements, to stockholders