Untitled Flashcard Set

Accounting

Planning, recording, analyzing, and interpreting financial information.

Accounting System

A planned process for providing financial information that will be useful to management.

Accounting Records

Organized summaries of a business’s financial activities.

Financial Statements

Financial reports that summarize the financial condition and operations of a business.

Service Business

A business that performs an activity for a fee.

Proprietorship

A business owned by one person.

Asset

Anything of value that is owned.

Equities

Financial rights to the assets of a business.

Liability

An amount owed by a business.

Owner’s Equity

The amount remaining after the value of all liabilities is subtracted from the value of all assets.

Accounting Equation

An equation showing the relationship among assets, liabilities, and owner’s equity.

Ethics

The principles of right and wrong that guide an individual in making decisions.

Business Ethics

The use of ethics in making business decisions.

Transaction

A business transaction that changes the assets, liabilities, or owner's equity.

Account

A record summarizing all the information pertaining to a single item in the accounting equation.

Account Title

The name given to an account.

Account Balance

Amount of money in the account.

Capital

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

Revenue

Increase in owner's equity resulting from the operation of the business.

Sale on Account

A sale for which cash will be received at a later date.

Expense

A decrease in owner's equity resulting from the operation of a business.

Withdrawal

Assets taken out of a business for the owner’s personal use.