Chapter 1 Vocab

Question 0

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

Answer 0

Accounting system

Question 1

Planning, recording, analyzing, and interpreting financial information

Answer 1

Accounting

Question 2

Organized summaries of a business’s financial activities

Answer 2

Accounting records

Question 3

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

Answer 3

Financial statements

Question 4

A business that performs an activity for a fee

Answer 4

Service business

Question 5

A business owned by one person

Answer 5

Proprietorship

Question 6

Anything of value that us owned

Answer 6

Asset

Question 7

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

Answer 7

Owner’s equity

Question 8

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

Answer 8

Accounting equation

Question 9

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

Answer 9

Ethics

Question 10

The use of ethics in making business decisions

Answer 10

Business ethics

Question 11

A business activity that changes assets, liabilities, or owner’s equity

Answer 11

Transaction

Question 12

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

Answer 12

Account

Question 13

The name given to an account

Answer 13

Account title

Question 14

The amount in an account

Answer 14

Account balance

Question 15

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

Answer 15

Capital

Question 16

An increase in owner’s equity resulting from the operation of a business

Answer 16

Revenue

Question 17

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

Answer 17

Sale on account

Question 18

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

Answer 18

Expense

Question 19

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

Answer 19

Withdrawals