accounting 1 test chapter 1

Question 1

accounting system

Answer 1

designed to compile financial date

Question 2

equities

Answer 2

financial rights to the assets of a business

Question 3

account

Answer 3

a record that summarizes all the transaction pertaining

Question 4

account balance

Answer 4

the difference between the increases and decreases

Question 5

accounting

Answer 5

planning, recording, analyzing

Question 6

asset

Answer 6

value that is owned

Question 7

capital account

Answer 7

summarize the owners equity in a business

Question 8

equity

Answer 8

difference between assets and liabilities

Question 9

ethics

Answer 9

principles of right and wrong

Question 10

financial statements

Answer 10

financial reports that summarize the financial condition

Question 11

GAAP

Answer 11

Generally Accepted Accounting Principles

Question 12

liability

Answer 12

amount owed

Question 13

net worth statement

Answer 13

formal report that shows what an individual owns

Question 14

owners equity

Answer 14

amount remaining after the value of all liabilities is subtracted

Question 15

personal net worth

Answer 15

difference between personal assets and personal liabilities

Question 16

sale on account

Answer 16

a sale for which payment will be received at a later date

Question 17

service business

Answer 17

performs an activity for a fee

Question 18

transaction

Answer 18

any business activity that changes, asset, liabilities, or owners equity

Question 19

withdrawals

Answer 19

assets taken from the business for the owners personal use

Question 20

accounting equation

Answer 20

the equation showing the relationship among assets, liabilities, and owners equity

Question 21

business ethics

Answer 21

ethics in making business decisions

Question 22

business plan

Answer 22

a formal written document

Question 23

creditor

Answer 23

to whom a liability

Question 24

expense

Answer 24

the cost of goods used to operate a business

Question 25

proprietorship

Answer 25

owned by one person

Question 26

revenue

Answer 26

an increase in equity resulting from the sale of goods or services

Question 27

account title

Answer 27

the name given to an account