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Accounting 1 > Unit 1 > Flashcards

Unit 1 Flashcards

1
Q

what is accounting?

A

recording any financial information

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2
Q

what is an accounting system?

A

compiles financial data, summarizes results in records + reports

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3
Q

what is a financial statement?

A

reports and summarizes financial condition and operations of business

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4
Q

what is a net worth statement?

A

allows a person extending a loan to see financial position of borrower on specific date

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5
Q

what is an asset?

A

anything of value that is owned

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6
Q

what is a liability?

A

any amount owed

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7
Q

what is personal net worth?

A

difference between personal assets and liabilities

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8
Q

what is equity?

A

difference between business assets and liabilities

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9
Q

what are ethics?

A

principles of right and wrong that guide you to make good decisions

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10
Q

what are business ethics?

A

use of ethics in making business decisions

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11
Q

what is a service business?

A

business performs service for a fee

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12
Q

what is a proprietorship?

A

business owned by one person

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13
Q

what is a business plan?

A

written document describes nature of business and how it works

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14
Q

what does gaap stand for?

A

generally accepted accounting principles

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15
Q

what are equities?

A

financial rights to assets of a business

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16
Q

what is owner’s equity?

A

amount remaining after liabilities subtracted from all assets

17
Q

what is an accounting equation?

A

shows relationship among assets, liabilities, and owner’s equity

18
Q

what is a transaction?

A

any business activity that changes assets, liability, or owner’s equity

19
Q

what is an account?

A

record summarizes all transactions for single item on equation

20
Q

what is an account title?

A

name on account

21
Q

what is account balance?

A

difference between increases and decreases in account

22
Q

what is a capital account?

A

account used to summarize owner’s equity in business

23
Q

what is a creditor?

A

person or business to whom a liability is owed

Accounting 1 (1 decks)

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