vocab #1

Question 1

ethics

Answer 1

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

Question 2

equity

Answer 2

is defined as the diff. btwn assets and liability

Question 3

equities

Answer 3

financial rights to the assets a business

Question 4

creditor

Answer 4

a person or business to whom a liability is owed.

Question 5

capital account

Answer 5

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

Question 6

business plan

Answer 6

is a formal written document that describes the nature of a business and how it will operate

Question 7

business ethics

Answer 7

the use of ethics in making a business decisions

Question 8

asset

Answer 8

anything of value that is owned

Question 9

liability

Answer 9

an amount owed

Question 10

GAAP

Answer 10

helps ensure that all companies follow the same set of guidelines and practices when reporting financial data

Question 11

financial statements

Answer 11

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

Question 12

expense

Answer 12

the cost of goods or services used to operate a business (unlike a liability)

Question 13

net worth statements

Answer 13

a formal report that shows what an idviual owns, what an individual owes, and the diff. between the two.

Question 14

owners equity

Answer 14

the amount remaining after the value of all the liabilities Is subtracted from the value of all assets

Question 15

accounting system

Answer 15

is a planned process designed to compile financial data and summarize the results in accounting records and reports.

Question 16

accounting equation

Answer 16

the equation showing the relationship among assets, liabilities, and owners equity.

Question 17

accounting

Answer 17

is the process of planning, recording, analyzing, and interpreting financial info.

Question 18

account title

Answer 18

the name given to an account

Question 19

account balance

Answer 19

the diff. btwn the increases and decreases in an account

Question 20

account

Answer 20

a record that summarizes all the transaction pertaining to a single item in the accounting equation

Question 21

proprietorship

Answer 21

is a business owned by one person

Question 22

revenue

Answer 22

an increase in equity resulting from the sale of goods and services

Question 23

sale on account

Answer 23

a sale for which a payment will be received @ a later date

Question 24

service business

Answer 24

a business that preforms an activity for a fee

Question 25

transaction

Answer 25

accountants call any business activity that changes assets, liabilities and owner's equity

Question 26

withdrawals

Answer 26

assets taken form the business for the owners personal use

Question 27

personal net worth

Answer 27

the diff. btwn. personal assets and personal liabilities