Financial Glossary

　　Accounting: The recording, summarizing, reporting, and interpreting of financial transactions.

　　Assets: Something of value that can be used to repay a debt.

　　Balance sheet: An abbreviated list of assets and liabilities

　　Budget: This is a prediction of the financial condition of an individual or organization for a future period.

　　Capital: Represent net worth as well as ownership in an enterprise.

　　Cash flow: This is the difference between the cash flowing into and out of an institution.

　　Credit: An accounting entry that increases liabilities, capital, and income accounts.

　　Debit: This accounting entry increases assets and expense accounts.

　　Depreciation: This is the decrease in the value of an asset over time.

　　Equity: Represents what shareholders own and is measured by the excess of assets over the liabilities.

　　Expenses: Payments made for the costs of operations.

　　Financial ratio: This is a method of showing a relationship between two numbers.

　　Income: This is an amount of gain or benefit in return for an investment of labor or resources.

　　Income statement: This financial document shows the company's income and expenses over a given period.

　　Liability: This is a legal obligation to repay a debt.

　　Net income: This is the Difference between total expense and total income.

　　Key Players

　　Player Role

　　CEO They use financial data to steer the organization to the strategic vision, mission, and goals of the organization.

　　CFO They ensure that the financial data is accurate and create reports. In addition, they analyze the information and help the CEO make decisions.

　　Senior Leadership They use financial data to control budgets of several departments and business units.

　　Accounting They collect financial data and record them daily in computer systems for compiling at the end of the month.

　　Department Managers They use financial data to manage their areas or business units.

　　Board of Directors They use financial data to determine how well the organization is doing and hold leaders accountable for meeting budgets and other obligations.

　　Government Regulators They use financial data to determine if the company is being managed according to rules.

　　Stockholders They use financial data to determine if the company if profitable and being managed well.

　　Investors They use financial data to determine if they want to purchase stocks in hopes of a financial return.

　　Creditors They use financial data to determine if the company is capable of paying back a new or current loan.

　　Important Financial Organizations

　　• United States Securities and Exchange Commission (SEC): The SEC works with private organizations like the AICPA and FASB to help set standards for accounting principles.

　　• American Institute of Certified Public Accountants (AICPA): This organization publishes audit and accounting guidelines, provide guidance on financial reporting topics until standards are set by the FASB or GASB. Publish practice bulletins, which focus on reporting issues not handled by the FASB or GASB

　　• Financial Accounting Standards Board (FASB): This organization publishes the statements of financial accounting standards, statements of financial accounting concepts, interpretations, and technical bulletins related to accounting standards.

　　This organization also has an Emerging Issues Task Force (EITF), which handles new and unusual financial issues that may have the potential to be a larger problem in the industry.

　　• Governmental Accounting Standards Board (GASB): This organization deals with government financial reporting issues. It resembles the FASB, but deals exclusively with government agencies.