Chapter 1

Question 1

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

Answer 1

account

Question 2

the amount in an account

Answer 2

account balance

Question 3

name given to an account

Answer 3

account name

Question 4

planning, recording, analyzing, & interpreting financial information

Answer 4

accounting

Question 5

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

Answer 5

accounting equation

Question 6

organized summaries of a business’s financial activities

Answer 6

accounting records

Question 7

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

Answer 7

accounting system

Question 8

anything of value that is owned

Answer 8

asset

Question 9

the use of ethics in making business decisions

Answer 9

business ethics

Question 10

financial rights to the assets of a business

Answer 10

equities

Question 11

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

Answer 11

capital

Question 12

the principles of right and wrong that guide an individual in making decisions

Answer 12

ethics

Question 13

a decrease in owner’s equity resulting from the operation of a business

Answer 13

expense

Question 14

financial reports that summarize the financial condition and operations of a business

Answer 14

financial statements

Question 15

an amount owed by a business

Answer 15

liability

Question 16

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

Answer 16

owner’s equity

Question 17

a business owned by one person

Answer 17

proprietorship

Question 18

an increase in owner’s equity resulting from the operation of a business

Answer 18

revenue

Question 19

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

Answer 19

sale on account

Question 20

a business that performs an activity for a fee

Answer 20

service business

Question 21

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

Answer 21

transaction

Question 22

assets taken out of a business for the owner’s personal use

Answer 22

withdrawals