| A | B |
|---|
| A formal report that shows what an individual owns, what an individual owes, and the difference between the two. | net worth statement |
| Planning, recording, analyzing, and interpreting financial information. | accounting |
| An equation showing the relationship among assets, liabilities, and owner’s equity. | accounting equation |
| A business activity that changes assets, liabilities, or owner’s equity. | transaction |
| A planned process for providing financial information that will be useful to management. | accounting system |
| The standards and rules that accountants follow while recording and reporting financial activities. | GAAP |
| The account used to summarize the owner’s equity in the business. | capital account |
| The amount remaining after the value of all liabilities is subtracted from the value of all assets. | owner's equity |
| A record summarizing all the information pertaining to a single item in the accounting equation. | account |
| The difference between personal assets and personal liabilities. | personal net worth |
| Anything of value that is owned. | asset |
| A sale for which cash will be received at a later date. | sale on account |
| Assets taken out of a business for the owner’s personal use. | withdrawals |
| A formal written document that describes the nature of a business and how it will operate. | business plan |
| A business owned by one person. | proprietorship |
| The use of ethics in making business decisions. | business ethics |
| A business that performs an activity for a fee. | service business |
| The difference between assets and liabilities. | equity |
| Financial reports that summarize the financial conditions and operations of business. | financial statements |
| An amount owed by a business. | liability |
| A person or business to whom a liability is owed. | creditor |
| A decrease in owner’s equity resulting from the operation of a business. | expense |
| An increase in owner’s equity resulting from the operation of a business. | revenue |
| The amount in an account. | account balance |
| The name given to an account. | account title |
| Financial rights to the assets of a business. | equities |
| The principles of right and wrong that guide an individual in making decisions. | ethics |
