Sole proprietorship - a business owned by one person; most common form of business organization .
Partnership - voluntary association of two or more persons for the purpose of conducting a business.
Corporation - legal entity created under laws of a state or federal government
Accounting - process of measuring economic activity of an entity in monetary terms and communicating the results to users
GAAP - set of standards and procedures that guide the preparation of financial statements.
FASB - private, not-for-profit organization whose task is to develop generally accepted accounting principles in the united states.
Balance sheet - financial statement showing a business’s assets, ...view middle of the document...
Ratio analysis- process of expressing the relationship of one accounting number to another accounting number through the process of division.
Return on assets- a measure of profitability; net income divided by average total assets.
Trend analysis- process in which an analyst or inventor compares a company’s results or results of a ratio, over time.
Benchmarking analysis-technique where the analyst or investor compares a firm’s performance, or a ratio like ROA, to that of a firm’s principal competitors or to an industry average.
Liquidity - measure of a company’s ability to pay it’s obligations expected to come due in the next year.
Qualitative characteristics of accounting information- characteristics of accounting information that contribute to decision usefulness; understandability and decision usefulness, relevance, reliability, comparability, consistency.
Recognition and measurement criteria- criteria that must be met before a financial statement element may be recorded in the accounts. Essentially, the item must meet the definition of an element and must be...