Chapter 1 Vocab Flashcards
a business that performs an activity for a fee
Service business
a business activity that changes assets, liabilities, or owner’s equity
Transaction
the amount in an account
Account balance
planning, recording, analyzing, and interpreting financial information
Accounting
anything of value that is owned
Asset
a record summarizing all the information pertaining to a single item in the accounting equation
Account
the amount remaining after the value of all liabilities is subtracted from the value of all assets
Owner’s equity
a planned process for providing financial information that will be useful to management
Accounting system
an increase in owner’s equity resulting from the operation of a business
Revenue
a business owned by one person
Proprietorship
financial rights to the assets of a business
Equities
organized summaries of a business’s financial activities
Accounting records
assets taken out of business for the owner’s personal use
Withdrawal
the principles of right and wrong that guide an individual in making decisions
Ethics
a decrease in owner’s equity resulting from the operation of a business
Expense
the name given to an account
Account title
an amount owed by a business
Liability
a sale for which cash will be received at a later date
Sale on account
financial reports that summarize the financial condition and operations of a business
Financial statements
an equation showing the relationship among assets, liabilities, and owner’s equity
Accounting equation
the use of ethics in making business decisions
Business ethics
the account used to summarize the owner’s equity in a business
Capital
