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Chapter 1: Starting a Proprietorship

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Term
Definition
Account   a record summarizing all the information pertaining to a single item in the accounting equation  
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Accoounting   planning, recording, analyzing, and interpreting financial information  
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Accounting Equation   an equation showing the relationship among assets, liabilities, and owner's equity  
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Assets   anything of value that is owned  
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Balance Sheet   a financial statement that reports assets, liabilities, and owner's equity on a specific date  
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Capital   the account used to summarize the owner's equity in a business  
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Equities   financial rights to the assets of a business  
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Liability   an amount owed by a business  
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Owner's Equity   the amount remaining after the value of all liabilities is subtracted from the value of all assets  
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Proprietorship   a business owned by one person  
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Transaction   a business activity that changes assets, liabilities, or owner's equity  
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