Study Guide 1: Identifying Accounting terms
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22 terms
Terms | Definitions |
|---|---|
 accounting | Planning, recording, analyzing, and interpreting financial information |
| accounting system | A planned process for providing financial information that will be useful to management. |
| accounting records | Organized summaries of a business's financial activities |
| financial statements | Financial reports that summarize the financial condition and operations of a business. |
| service business | A business that performs an activity for a fee. |
| proprietorship | A business owned by one person. |
| asset | Anything of value that is owned. |
| equities | Financial rights to the assets of a business. |
| liability | An amount owed by a business. |
| owner's equity | The amount remaining after the value of all liabilities is subtracted from the value of all assets. |
| accounting equation | An equation showing the relationship among assets, liabilities, and owner's equity. |
| ethics | The principles of right and wrong that guide an individual in making decisions. |
| business ethics | The use of ethics in making business decisions. |
| transaction | A business activity that changes assets, liabilities, or owner's equity. |
| account | A record summarizing all the information pertaining to a single item in the accounting equation. |
| account title | The name given to an account |
| account balance | The amount in an account |
| capital | The account used to summarize the owner's equity in a business |
| revenue | An increase in owner's equity resulting from the operation of a business |
| sale on account | A sale for which cash will be received at a later date. |
| expense | A decrease in owner's equity resulting from the operation of a business. |
| withdrawals | Assets taken out of a business for the owner's personal use. |
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