Vocab 1
The process of planning, recording, analyzing, and interpreting financial information.
Accounting
Anything that is owed.
Liability
Anything of value that is owned.
Asset
The difference between personal assets & liabilities.
Personal Net Worth
The difference between assets & liabilties.
A planned process designed to compile financial data and summarize the results in accounting records and reports.
Accounting System
The principles of right and wrong that guide an individual in making decisions.
The use of ethics in making business decisions.
A business that performs an activity for a fee.
A business owned by one person.
Proprietorship
Financial reports that summarize the financial condition and operations of a business.
Financial Statements
A formal written document that describes the nature of a business and how it will operate.
Business Plan
Generally Accepted Accounting Principles.
GAAP
Financial Rights to the assets of a business.
Equities
The amount remaining after the value of all liabilities is subtracted from the value of all assets.
Owner's Equity
The equation showing the relationship among assets, liabilities, and owner's equity.
Accounting Equation
Any business activity that changes assets, liabilities, or owner's equity.
Transaction
A record that summarizes all transactions that take place pertaining to a single item
Account
The name given to an account
Account Title
The difference between the increase and decrease of an account. (How much is in the account)
Account Balance
Assets taken from the business (by the owner) for personal use.
Withdrawals
The cost of goods and services to operate a business
Expenses
A person of business to whom a lability is owed.
Creditor
Capital Account
A sale for which payment will be received at a later date.
Sale on account