Chapter 1 vocab Flashcards
(26 cards)
Account
Record that summarizes all the transactions pertaining to a single item in the accounting equation.
Account balance
Difference between the increase and decrease in an account.
Account tittle
Name given to an account
Accounting
Process of planning , recording, analyzing, and interpreting financial information.
Accounting equations
Equation showing the relationship among assets, liabilities, and owner´s equity.
Accounting system
Planned process designed to compile financial data & summarize results in accounting records & reports.
Asset
Anything of value that is owned.
Withdrawals
Assets taken form the business for the owner´s personal use.
Business plan
Formal written document that describes the nature of a business and how it will operate.
Capital account
Account used to summarize the owner´s equity in a business.
Creditor
Person or business to whom a liability is owed.
Equities
Financial rights to the assets of a business.
Equity
Difference between assets and liabilities.
Ethics
Principles of the right and wrong that guide an individual in marking decisions.
Expense
Cost of goods or services used to operate a business.
Financial statements
Financial reports that summarize the financial condition and operations of a business.
GAAP
Generally accepted accounting principles. Standards and rules that accountants follow while recording and reporting financial activities.
Liability
Amount owed.
Net work statement
Formal report, showing what an individual owns & what the individual owes, and difference between the two
Owner´s equities
Amount remaining after the value of all liabilities is subtracted from the value of all assets.
Personal net work
Difference between personal assets and personal liabilities.
Proprietorship
Business owned by one person.
Revenue
Increases in equity resulting from the sale of goods or services.
Sale on account
Sale for which payment will be received at a later date.
