High School Accounting

Proprietorship

A business owned by one person

Asset

Anything of value that is owned

Liability

An amount owed by a business

Accounting Equation

Assets = Liabilities + Owner's Equity)

Transaction

A business activity that changes assets, liabilities, or owner's equity

Capital

The account used to summarize the owner's equity in a business

Revenue

An increase in owner's equity resulting from money generated from business operations

Withdrawals

Cash taken out of a business for the owner's personal use

Debit

An amount recorded on the left side

Credit

An amount recorded on the right side

Source Document

A business paper from which information is obtained for a journal entry

Posting

Transferring information from a journal entry to a ledger account

Balance Sheet

A financial statement that reports assets, liabilities, and owner's equity

Income Statement

A financial statement showing the revenue and expenses