Accounting Unit 1 Flashcards
What is the accounting equation?
Assets=liabilities+owners equity
Planning, recording, analyzing and interpreting financial information
Accounting
Planned process for providing financial information
Accounting system
Organized summaries of a businesses financial activities
Accounting records
Reports that summarize the financial condition and operation of a business
Financial statements
Business that performs an activity for a fee
Service business
A business owned by one person
Proprietorship
Anything of value that is owned
Assets
Amount owed
Liability
Financial rights to the assets of business
Equity
Account that summarizes the owners equity
Capital
The amount remaining after subtracting the liabilities from the assets
Owners equity
Business activity that changes assets, liabilities or owners equity
Transaction
Record summarizing all information for a single item
Account
Name given to the account
Account title
The amount in an account
Account balance
An increase in owners equity resulting from the operation of the business
Revenue
A sale for which cash will be received at a later date
Sale on account
A decrease in owners equity resulting from the operation of a business
Expense
Assets taken out of a business for the owners personal use
Withdrawals
Keeping personal separate from business
Business entity
Owners equity umbrella
- Revenue
- Expense
- Capital
- Withdrawal
Another name for liability
Accounts payable
Another name for a customer
Accounts receivable
