Chapter 1 Terms

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Accounting, Chapter 1 Terms
Definition
Accounting   Language of Business  
Account   A record summarizing all the information pertaining to a single item in the accounting equation.  
Account Title   The name given to an account.  
Account Balance   The amount in an account.  
Capital   The account used to summarize the owner's equity in a business.  
Transaction   A business activity that changes assets, liabilities, or owner's equity.  
Asset   Anything of value that is owned.  
Equilites   Financial rights to the assets of a business.  
Liability   An amount owed by a business.  
Owner's Equity   The amount remaining after the value of all liabilities is subtracted from the value of all assets.  
Accounting Equation   An equation that shows the relationship among assets, liabilities, and owner's equity.  
Revenue   An increase in owner's equity resulting from the operation of a business.  
Sale on Account   A sale for which cash will be received at a later date.  
Expense   A decrease in owner's equity resulting from the operation of a business.  
Withdrawal   Decreases owner's equity.  


   

 
 

 
 

 

 

 
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