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