Planning, recording, analyzing, and interpreting financial information
Accounting
A planned process for providing financial information that will be useful to management
Accounting system
Organized summaries of a business’s financial activities
Accounting records
A business that performs an activity for a fee
Service business
A business owned by one person
Proprietorship
Anything of value that is owned
Asset
Financial rights to the assets of a business
Equities
An amount owed by a business
Liability
The amount remaining after the value of all liabilities is subtracted from the value of all assets
Owner’s equity
An equation showing the relationship among assets, liabilities, and owner’s equity
Accounting equation
A business activity that changes assets, liabilities, or owner’s equity
Transaction
A record summarizing all the information pertaining to a single item in the accounting equation
Account
The name given to an account.
Account title
The amount in an account
Account balance
The account used to summarize the owner’s equity in a business
Capital
A financial statement that reports assets, liabilities, and owner’s equity on a specific date
Balance sheet