22 terms

Mach Chapter1

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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 are called.
Service business
A business that performed an activity for a fee.
Proprietorship
A buisness owned by one person.
Asset
Anything of value that is owned.
Equities
Financial rights to an asset of a buisness.
Liability
An amount owed by a buisness.
Owner's equity
The amount remaining after the value of all liabilities is subtracted from the value of all assets.
Accounting equations
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 dicisions.
Business ethics
The use of ethics in making buisness decisions.
Transactions
A business activity that changes assets, liabilities, or owner's equity.
Account
A recording summarizing all the information pertained in to a single item in the accounting equations.
Accounting title
The name given to an account.
Accounting balance
The amount in an account.
Capital
The amount 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.
Withdraw
Assets taken out of a business for the owner's personal use.