Chapter 1 Terms

Chapter 1 Terms - Accounting The information system that...

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Accounting The information system that identifies, records, and communicates the economic events of an organization to interested users. Assets Resources a business owns. Auditing The examination of financial statements by a certified public accountant in order to express an opinion as to the fairness of presentation. Balance sheet A financial statement that reports the assets, liabilities, and owner's equity at a specific date. Basic accounting equation Assets = Liabilities + Stockholders' Equity. Bookkeeping A part of accounting that involves only the recording of economic events. Common stock Term used to describe the total amount paid in by stockholders for the shares they purchase. Corporation A business organized as a separate legal entity under state corporation law, having ownership divided into transferable shares of stock. Cost principle An accounting principle that states that companies should record assets at their cost. Dividend A distribution by a corporation to its stockholders on a pro rata (equal) basis. Economic entity assumption An assumption that requires that the activities of the entity be kept separate and distinct from the activities of its owner and all other economic entities. Ethics
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This note was uploaded on 10/21/2011 for the course ACCT 272 taught by Professor Mensah during the Fall '08 term at Rutgers.

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Chapter 1 Terms - Accounting The information system that...

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