All About Accounting
Planning, recording, analyzing, and interpreting financial information
What is accounting?
Assets = Liabilities + Owners Equity
What is the accounting equation?
A business owned by one person.
What is a sole proprietorship?
This must remain in balance after each transaction.
What is the accounting equation?
Anything of value that is owned
Standards and rules accountants follow.
What is GAAP?
Assets - Liabilities = (this)
Owners Equity
A business owned by two or more owners, with unlimited liability for owners.
What is a partnership?
An amount owed by a business.
What is a liability?
The account that summerizes owners equity in a business.
What is a captial account?
Financial rights to the assets in a business.
What is equity?
Individual shareholders loss is limited to amount of money invested in the corporation.
What is limited liability?
A report that shows what an individual owns, owes, and the difference between the two.
What is a personal net worth statement?
A sale for which cash will be recieved at a later date.
What is sale on account?
A record summerizing all the information pertaining to a single item in the accounting equation.
What is an account?
The amount in an account.
What is an account balance?
Shares sold over a stock exchange to members of the general public.
What is a publicly held corporation?
The costs resulting for the operations of a business.
What is an expense?
What is an account title?
A business activity that changes assets, liability, and or owners equity.
What is a transaction?
A planned process for providing financial information.
What is an accounting system?
What is a corporation?
An increase in owners equity resulting from normal business activity.
What is revenue?
An entitiy the business owes money to.
What is a creditor?