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41 Cards in this Set
- Front
- Back
planning, recording, analyzing, and interpreting financial information
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accounting
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a planned process for providing financial information that will be useful to management
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accounting system
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organized summaries of a business's financial activities
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accounting records
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financial reports that summarize the financial condition and operations of a business
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financial statements
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a business that is owned by one person
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proprietorship
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a business that performs an activity for a fee
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service business
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anything of value that is owned
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asset
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financial rights to the assets of a business
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equities
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the amount owed by a business
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liability
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the amount remaining after the value of all liabilities is substracted from the value of all assets
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owner's equity
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an equation showing the relationship among assets, liabilities, and owners equity
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accounting equation
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the principles of right and wrong that guide an individual in making decisions
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ethics
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the use of ethics in making business decisions
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business ethics
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a business activity that changed assets, liabilities, or owners equity
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transaction
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a record summarizing all the information pertaining to a single item in the accounting equation
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account
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the name given to an account
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account title
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the amount in an account
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account balance
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the account used to summarize the owners equity in a business
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capital
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an increase in owners equity resulting from the operation of a business
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revenue
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a sale for which cash will be received at a later date
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sale on account
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a decrease in owners equity resulting from the operation of a business
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expense
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assets taken out of a business for the owners personal use
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withdrawal
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T/F: accounting is the language of business
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true
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T/F:keeping personal and business records separate is an application of the business entity concept
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true
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T/F: assets such as cash and supplies have value because they can be used to acquire other assets or be used to operate a business
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true
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T/F: keeping personal and business records separate is an application of the business entity concept
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true
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T/F: assets such as cash and supplies have value because they can be used to acquire other assets or be used to operate a business
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true
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T/F: the relationship among assets, liabilities, and owners equity can be written as an equation
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true
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T/F: the accounting equation does not have to be in balance to be correct
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false
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T/F: Recording business costs in terms of house required to complete projects is an application of the unit of measurement concept
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false
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T/F: The capital account is an owners equity account
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true
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T/F: If two amounts no are recorded on the same side of the accounting equation, the equation will no longer be in balance
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false
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T/F: When a company pays insurance premiums in advance to an insurere, it records the payment as a liability because the insurere owes future coverage
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false
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T/F: when items are bought and paid for later this is referred to as buying on account
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true
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T/F: when cash is paid on account, a liability is increased
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false
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T/F: When cash is received from sale, the total amount of both assets and owners equity is increased
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true
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T/F; a sale for which cash will be received at a later date is called charge sale
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false
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T/F: The accounting concept Realization of Revenue is applied when revenue is recorded at the time goods or services are sold
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true
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T/F: when cash is paid for expenses, the business has more equity
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false
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T/F: when a company receives cash froma customer for a prior sale, the transaction increases the cash amount balance and increases the accounts receivable balance
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false
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T/F: a withdrawal decreases owners equity
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true
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