AP®︎ Business with Personal Finance: Topic 3.3 Flashcards

Master key terms and definitions for Topic 3.3 of AP Business with Personal Finance – Accounting and Financial Management to help you prep for quizzes and the AP exam.

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Term

Accounting

Definition

The process of identifying, recording, organizing, and reporting financial transactions

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Accounting
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The process of identifying, recording, organizing, and reporting financial transactions

3.3.B3.3.B.1
Financial Management
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Using financial information to plan and recommend actions that maintain or improve financial performance

3.3.B3.3.B.4
Financial Transaction
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An event involving money or another item of financial value that affects financial position

3.3.A
Asset
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A resource of value owned or controlled by a business or consumer

3.3.A
Liability
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A debt or other financial obligation owed by a business or consumer

3.3.A
Owners' Equity
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The value of a business attributable to its owners: owners' equity = assets − liabilities

3.3.A3.3.A.1
Personal Net Worth
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The value of a consumer’s assets remaining after liabilities are subtracted: net worth = personal assets − personal liabilities

3.3.A3.3.A.2
Reporting Period
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The span of time covered by a financial report, such as a month, quarter, or year

3.3.A3.3.A.4
Financial Statement
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A report summarizing a business’s financial activity, performance, or condition

3.3.A3.3.A.3
Generally Accepted Accounting Principles (GAAP)
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Common financial accounting and reporting standards requiring publicly held corporations to disclose positive and negative information consistently for each reporting period

3.3.A3.3.A.4
Accounting Department
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The business unit that identifies and records financial transactions and prepares financial statements

3.3.B3.3.B.1
Managerial Accounting / Managerial Accountant
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Accounting that provides information and analysis to managers and other internal stakeholders for planning, control, and decision making

3.3.B3.3.B.2
Financial Accounting / Financial Accountant
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Accounting that provides financial information and analysis primarily to external stakeholders such as shareholders, investors, and lenders

3.3.B3.3.B.3
Finance Department
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The business unit that analyzes accounting data and recommends strategies to maintain or improve financial performance

3.3.B3.3.B.4
Financial Advisor
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A professional who helps consumers evaluate their financial position and plan decisions about saving, borrowing, investing, retirement, and other uses of money

3.3.B3.3.B.5
Accountant
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A professional who may organize consumers’ financial records, explain the financial or tax effects of transactions, and prepare tax filings

3.3.B3.3.B.5
Income Statement
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A financial statement summarizing revenue, costs, and profit or loss over a period

3.3.A3.3.A.3
Balance Sheet
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A financial statement summarizing assets, liabilities, and owners’ equity at a specific point in time

3.3.A3.3.A.3
Cash Flow Statement
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A financial statement summarizing cash inflows and outflows over a period

3.3.A3.3.A.3