Key Terms - Chapter 1

Key Terms - Chapter 1 - Accounting- Information and...

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Accounting- Information and measurement system that identifies, records, and communicates relevant information about a company’s business activities. Accounting equation- Equality involving a company’s assets, liabilities, and equity; Assets = Liabilities + Equity; also called balance sheet equation. Assets- Resources a business owns or controls that are expected to provide current and future benefits to the business. Auditors- Analysis and report of an organization’s accounting system, its records, and its reports using various tests. Balance sheet- Financial statement that lists types and dollar amounts of assets, liabilities, and equity at a specific date. Business entity assumption- Principle that requires a business to be accounted for separately from its owner(s) and from any other entity. Common stock- Corporation’s basic ownership share; also generically called capital stock. Contributed capital- Total amount of cash and other assets received from stockholders in exchange for stock; also called paid-in capital. Corporation- Business that is a separate legal entity under state or federal laws with owners called shareholders or stockholders. Cost principle- Accounting principle that prescribes financial statement information to be based on actual costs incurred in business transactions. Dividends- Corporation’s distributions of assets to its owners. Equity- Owner’s claim on the assets of a business; equals the residual interest in an entity’s assets after deducting liabilities; also called net assets. Ethics- Codes of conduct by which actions are judged as right or wrong, fair or unfair, honest or dishonest.
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This note was uploaded on 04/04/2012 for the course ACCT 203 taught by Professor Hylton during the Spring '08 term at George Mason.

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Key Terms - Chapter 1 - Accounting- Information and...

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