Ch 1 Vocab

Question 1

Planning, recording, analyzing, and interpreting financial information.

Answer 1

Accounting

Question 2

A planned process for providing financial information that will be useful to management.

Answer 2

Accounting system

Question 3

Organized summaries of a business’ financial activities.

Answer 3

Accounting records

Question 4

A business that performs an activity for a fee.

Answer 4

Service business

Question 5

A business owned by one person.

Answer 5

Sole proprietorship

Question 6

Anything of value that is owned.

Answer 6

Asset

Question 7

Financial rights to the assets of a business.

Answer 7

Equities

Question 8

An amount owed by a business.

Answer 8

Liability

Question 9

The amount remaining after the value of all liabilities is subtracted from the value of all assets.

Answer 9

Owner’s Equity

Question 10

An equation showing the relationship among assets, liabilities and owner’s equity

Answer 10

Accounting equation

Question 11

A business activity that changes assets, liabilities, or owner’s equity.

Answer 11

Transaction

Question 12

A record summarizing all the information pertaining to a single item in the accounting equation.

Answer 12

Account

Question 13

The name given to an account

Answer 13

Account title

Question 14

The amount in an account.

Answer 14

Account balance

Question 15

The account used to summarize the owner’s equity in a business.

Answer 15

Capital

Question 16

A financial statement that reports assets, liabilities, and owner’s equity on a specific date.

Answer 16

Balance sheet