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50 Cards in this Set
- Front
- Back
BUSINESS
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All activities necessary to provide the members of an economic system with good or services.
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WHOLESALERS
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Companies that distribute goods to retail outlets.
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RETAILERS
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Companies that sell goods to consumers.
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BUSINESS ENTITIES
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Organized to earn a profit; consists of three types.
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SOLE PROPRIETOR
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A form of organization operated to earn a profit,
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ECONOMIC ENTITY CONCEPT
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The assumption that a single, identifiable unit must be accounted for in all situations.
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TRUE
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TRUE OR FALSE: A sole proprietor is not a taxable entity.
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PARTNERSHIP
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A business owned by two or more individuals.
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TRUE
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Corporations control an overwhelming majority of the private resources in the US.
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CORPORATION
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An entity organized under the laws of a particular state..
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SHARE OF STOCK
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A certificate that acts as evidence of ownership in a corporation.
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BOND
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A certificate that represents a corporation's promise to repay a certain amount of money and interest in the future.
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TWO ADVANTAGES OF INCORPORATION
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The ability to raise large amounts of money in a relatively brief period of time, and the ease of ownership in a corporation.
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NONBUSINESS ENTITY
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An organization operated for some purpose other than to earn a profit.
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LIABILITY
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An obligation to a business
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NOTE PAYABLE
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When a company borrows money at a bank, this liability is known as... (8)
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BONDS PAYABLE
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When a company sells a bond, the obligation is termed as... (8)
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TAXES PAYABLE
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Amounts owed to the government for taxes is called... (8)
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CAPITAL STOCK
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Indicates the owners' contributions to a corporation. (9)
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STOCKHOLDER
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Someone providing a permanent form of financing to a business; one of the owners of a corporation. (9)
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CREDITOR
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Does not provide a permanent form of financing to a company; someone to whom a company or person has a debt.
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ASSET
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A future economical benefit to a business.
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REVENUE
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An inflow of assets resulting from the sale of goods and services.
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EXPENSE
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An outflow of assets resulting from the sale of goods and services.
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ACCOUNTING
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Process of identifying, measuring, and communicating economic information to various users.
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MANAGEMENT ACCOUNTING
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Branch of accounting concerned with providing management with information to facilitate planning with control.
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FINANCIAL ACCOUNTING
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Branch of accounting concerned with the preparation of financial statements for outsider use.
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THE ACCOUNTING EQUATION
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ASSETS = LIABILITIES + OWNER'S EQUITY
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LEFT SIDE OF THE ACCOUNTING EQUATION
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Assets; items valuable economic resources and will provide future benefits for company.
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RIGHT SIDE OF THE ACCOUNTING EQUATION
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Indicates who provided the assets
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OWNER'S EQUITY
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The owner's claim on the assets of an entity.
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STOCKHOLDER'S EQUITY
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The mathematical difference between a corporations's assets and its obligations or liabilities.
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RETAINED EARNINGS
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Part of owner's equity that represents the income earned less dividends paid over the life of an entity.
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BALANCE SHEET
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The financial statement that summarizes the assets, liabilities, and owner's equity at a specific point in time.
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INCOME STATEMENT
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A statement that summarizes revenues and expenses.
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NET INCOME
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The excess of revenue over expenses.
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DIVIDENDS
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A distribution of the net income of a business to its own.
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STATEMENT OF RETAINED EARNINGS
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Statement that summarizes the income earned and dividends paid over the life of business.
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STATEMENT OF CASH FLOWS
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The financial statement that summarizes a company's cash receipts and cash payments during the period from operating, investing, and financial activities.
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COST PRINCIPLE
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Assets are recorded at the cost to acquire them.
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GOING CONCERN
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The assumption that an entity is not in the process of liquidation and that it will continue indefinitely.
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MONETARY UNIT
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The yardstick used to measure amounts in financial statements; the dollar in the US.
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TIME PERIOD ASSUMPTION
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An artificial segment on the calendar used as the basis for preparing financial statments.
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GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
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The various methods, rules, practices and other procedures that have evolved over time in response to the need to regulate the preparation of financial statement.
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SECURITIES AND EXCHANGE COMMISSION
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The federal agency with the ultimate authority to determine the rules for preparing statements for companies whose stock is sold to the public.
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FINANCIAL ACCOUNTING STANDARDS BOARD
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The group in the private sector with authority to set accounting standards.
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AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
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The professional organization of certified public accountants.
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CPA
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Designation for an individual who has passed a uniform exam administered by the AICPA and has met other requirements as determined by individual states.
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PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD
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A five-member body created by an act of Congress in 2002 to set auditing standards.
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INTERNATIONAL ACCOUNTING STANDARDS BOARD.
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The organization formed to develop worldwide accounting standards.
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