1/44
Name | Mastery | Learn | Test | Matching | Spaced |
---|
No study sessions yet.
Accounting
The process of planning, recording, analyzing, and interpreting financial information
Accounting system
A planned process designed to compile financial data and summarize the results in accounting records and reports.
Financial statements
Financial reports that summarize the financial condition and operations of a business
Net worth statement
A formal report that shows what an individual owns, owes, and the difference between the two
Asset
Anything of value thats owned
Liability
An amount owed
Personal net worth
The difference between personal assets and personal liabilities
Equity
The difference between assets and liabilities
Ethics
The principles of right and wrong that guide an individual in making decisions
Business ethics
The use of ethics in making business decisions
Service business
A business that performs an activity for a fee
Proprietorship
A business owned by one person
Business plan
A formal written document that describes the nature of a business and how it will operate
GAAP
Generally Accepted Accounting Principles. The standards and rules accountants follow while recording and reporting financial activities
Equities
Financial rights to the assets of a business
Owner’s equity
The amount remaining after the value of all liabilities is subtracted from the value of all assets
Accounting equation
The equation showing the relationship among assets, liabilities, and owners equity.
Transaction
Any business activity that changes assets, liabilities, or owner’s equity
Account
A record that summarizes all the transactions pertaining to a single item in the accounting equation
Account title
The name given to an account
Account balance
The difference between the increases and decreases in an account
Capital account
An account used to summarize the owners equity in a business
Creditor
A person or business to whom a liability is owed
Revenue
Increase in equity resulting from the sale of goods or services
Sale on account
A sale for which payment will be received at a later date
Expense
The cost of goods or services used to operate a business
Withdrawals
Assets taken from the business for the owner’s personal use