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27 Cards in this Set
- Front
- Back
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Accounting |
Process of planning, recording, analyzing, and interpreting financial information |
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Accounting System |
Planned process designed to compile financial data and summarize the results in accounting records and reports |
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Financial Statements |
Financial reports that summarize the financial condition and operations of a business |
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Net Worth Statement |
A formal report that shows what an individual owes, and the difference between the two |
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Asset |
Anything of value that is owned |
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Liability |
An amount owed |
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Personal Net Worth |
The difference between personal assets and personal liabilities |
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Ethics |
The principles of right and wrong that guide an individual in making decisions |
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Business ethics |
The use of ethics in making business decisions |
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Service Business |
A business that performs an activity for a fee |
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Proprietorship |
A business owned by one person |
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Business Plan |
A formal written document that describes the nature of a business and how it will operate |
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GAAP |
The standards and rules that accountants follow while recording and reporting financial activities (generally accepted accounting principle) |
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Equities |
Financial rights to the assets of a business |
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Owners equity |
The amount remaining after the value of all liabilities is subtracted from the value of all assets |
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Accounting Equation |
The equation showing the relationship among assets, liabilities and owners equity |
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Transaction |
Accountants call any business activity that changes assets, liabilities, or owners equity |
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account |
A record that summarizes all the transactions pertaining to a single item in the accounting equation |
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Account Title |
The name given to the account |
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Account Balance |
The difference between the increases and decreases in an account |
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Capital Amount |
An account used to summarize the owners equity in a business |
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Creditor |
A person or business to whom a liability is owed |
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Revenue |
An increase in equity resulting from the sale of goods or services |
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Sale on Account |
A sale for which payment will be received at a later date |
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Expense |
Unlike a liability, which is an amount that is owed, the cost of goods or services used to operate a business |
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Withdrawals |
Assets taken from the business for the owners personal use |
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Equity |
The difference between assets and liabilities |
