Encyclopedia

National professional membership organization that represents practicing CERTIFIED PUBLIC ACCOUNTANTS (CPAs). The AICPA establishes ethical and auditing standards as well as standards […]

Substantive tests of financial information which examine relationships among data as a means of obtaining evidence. Such procedures include: (1) comparison of […]

Assets: Resources owned by a business that have economic value.

Balance sheet. A financial report that summarizes a company’s Assets (what it owns), Liabilities (what it owes), and Owner or Shareholder Equity (the […]

Balance Sheet: A financial statement showing assets, liabilities, and equity at a specific point in time.

Bookkeeping: The process of recording daily financial transactions.

Break-Even Point: The level of sales where total revenues equal total costs.

Budget: A financial plan estimating income and expenses over a period.

Business (or Legal) Entity. The legal structure, or “type”, of a business. Common entities include Sole Proprietor, Partnership, Limited Liability Corp (LLC), […]

Combining of two entities. Under the PURCHASE METHOD OF ACCOUNTING, one entity is deemed to acquire another and there is a new […]