Economic Entity Concept: The assumption that a single ,identifiable unit must be accounted for in all
Corporation: A form of entity organized under the laws of a particular province or the federal
Non-business Entity: organization operated for some purpose other than to earn profit.
Creditor: someone to whom a company or person has a debt.
Asset: A future economic benefit to an organization.
Revenue: Inflows of assets resulting from the sales of products and services.
Expense: Outflows of assets resulting from the sale of goods and services.
Accounting: The process of identifying, measuring, and communicating economic information to various
Owner's Equity: The owners claims on the assets of an entity.
Shareholder's Equity: The owners equity in a corporation.
Retained Earnings: part of owner's equity that represents the income earned less dividends paid over
the life of an entity.
Balance Sheet: The financial statement that summarizes the assets, liabilities, and owner's equity at a
specific point in time.
Income Statement: A statement that summarizes revenues and expenses.
Dividends: A distribution of the net income of a business to its owners.
Statement of Retained Earnings: The statement that summarizes the income earned and dividends paid
over the life of a business.
Cost Principal: Assets are recorded at the cost to acquire them.
Going Concern: The assumption that an entity is not in the process of liquidation and that it will
Depreciation: The process of allocating the cost of a long-term asset over its useful life ( amortization). Operating Cycle: The period of time between the purchase of inven