Chapter 1 Flashcards
Planning, recording analyzing, and interpreting financial information
Accounting
A planned process for providing financial information that will be useful to management
Accounting system
Organized summaries of a business’s financial activities
Accounting records
Financial reports that summarize the financial condition and operations of a business
Financial statements
A business that performs an activity for a fee
Proprietorship
Anything of value that is owned
Asset
Financial rights to the assets of a business
Equities
An amount owed by a business
Liability
The amount remaining after the value of all liabilities is subtracted from the value of all assets
Owners equity
An equation showing the relationship among assets, liabilities, and owners equity
Accounting equation
The principles of right and wrong that guide an individual in making decisions
Ethics
The use of ethics in making business decisions
Business ethics
A business activity that changes assets, liabilities, or owners equity
Transaction
A record summarizing all the information pertaining to a single item in the accounting equation
Account
The name given to an account
Account title
