Vocab 1
process of planning, recording, analyzing, and interpreting financial, and interpreting financial information
Accounting
the amount remaining after the value of all liabilities is subtracted from the value of all assets
owner's equity
accountants call any business activity that changes assets, liabilities, or owner’s equity
transaction
record that summarizes all the transaction pertaining to a single item
account
an amount owed (debt)
liability
person or business to whom a liability is owed
creditor
planned process design to compile financial data
Accounting Systems
increase in equity resulting from the sale of goods or services
revenue
difference between assets and liabilities
equity
business owned by one person
proprietorship
business that performs an activity for a fee
service business
formal written document that describes that nature of a business and how it will operate
business plan
financial reports that summarizes the financial condition
financial statement
standards and rules; generally accepted accounting principles
GAAP
OE= A-L
Accounting Equation
sale for which payment will be received at a later date
sale on account
the principle of right and wrong
ethics
cost of goods or services used to operate a business
expenses
the person extending the loan to see the financial position of a borrower on a specific date and make a lending decision
Net Worth Statement
assets taken from the business for the owner’s personal use
withdrawals
the use of ethics in making business decisions
business ethics
name given to an account
account title
difference between the increases and decreases in an account
account balance
difference between the increases and decreases in an account
capital account
anything of value that is owned
asset