Accounting Flashcards
Service Business
A business that preforms an activity for a fee
Accounting
Planning, recording, analyzing, and interpreting financial information
Proprietorship
A business owned by one person, also called a sole proprietorship
Business enity
Business’ financial information is recorded and reported separately from the owner’s personal financial info
Asset
Anything of value that is owned
Liability
An amount owned by a business
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
A=L+OE
Assets = Liabilities + Owner’s Equity
Transaction
A business activity that changes assets, liabilities, or owner’s equity
Unit of measurement
Applied when business transactions are stated in numbers that have common value
Account
A record summarizing all the information pertaining to a single item in the accounting equation
Account Title
Name given to an account; each part of the accounting equation consists of one or more accounts
Account balance
The amount is on account
