Accounting and Business Vocabulary (Video Notes)

Vocabulary flashcards covering core accounting and business terms derived from the lecture notes (Pages 1–2).

Accounting

The process of planning, recording, and analyzing financial information in an accounting system.

Accounting system

The framework used to collect, record, summarize, and report financial data.

Financial statements

Reports detailing a company’s financial activities and present financial information to support business decisions.

Net worth statement

A statement showing assets minus liabilities to determine personal or business net worth.

Asset

Anything of value owned by a person or business.

Liability

An amount owed; a financial obligation.

Personal net worth

An individual's net worth (assets minus liabilities).

Equity

represents ownership in a company or asset

Ethics

Principles of right and wrong that guide behavior.

Business ethics

Ethics applied to business decisions and practices.

Service business

A business that performs activities for a fee.

Proprietorship

A business owned by one person.

proprietorship

A business owned by one person

Business plan

A formal document describing the business and how it will operate.

GAAP

Generally Accepted Accounting Principles—the standards for accounting.

Owner's capital

Capital contributed by the owner; part of owner's equity.

Accounting equation

Assets = Liabilities + Owner’s Equity.

Transaction

An event that changes the financial position of a business and affects accounts.

Account

A record that summarizes the transactions for a single item in the accounting equation.

Account title

The name given to an account.

Account balance

The difference between total debits and credits in an account.

Capital account

An account that tracks the owner's equity in the business.

Creditor

A person or business to whom a liability is owed.

Revenue

Income earned from selling goods or providing services; increases equity.

Sales on account

A sale where payment will be received later (credit sale).

Expense

The cost of operating a business; decreases equity.

Withdrawals

Assets taken from the business by the owner for personal use.