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AR Acct I ch. 1
Accounting I Chapter 1 terms
Term | Definition |
---|---|
ACCOUNT | a record summarizing all the information pertaining to a single item in the accounting equation |
ACCOUNT BALANCE | the amount in an account |
ACCOUNT TITLE | the name given to an account |
ACCOUNTING | planning, recording, analyzing, and interpreting financial information |
ACCOUNTING EQUATION | an equation showing the relationship among assets, liabilities, and owner’s equity |
ACCOUNTING RECORDS | an organized summary of a business’s financial activities |
ACCOUNTING SYSTEM | a planned process for providing financial information that will be useful to management |
ASSET | anything of value that is owned |
BUSINESS ETHICS | the use of personal ethics in making business decisions |
CAPITAL | the account used to summarize the owner’s equity in a business |
CORPORATION | a legal entity that is separate and distinct from its owners |
EQUITIES | financial rights to the assets of a business |
ETHICS | the principles of right and wrong that guide an individual in making decision |
Expense | a decrease in owner’s equity resulting from the operation of a business |
Financial Statement | financial reports that summarize the financial conditions and operations 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 |
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 |
SERVICE BUSINESS | A business that performs an activity for a fee |
PROPRIETORSHIP | a business owned by one person |
TRANSACTION | a business activity that changes assets, liabilities, or owner’s equity |
Withdrawals | assets taken out of a business for the owner’s personal use |