| A | B |
|---|
| 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 | organized summaries 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 |
| Debit | an amount recorded on the left side of a T account |
| Equities | financial rights to the assets of a business |
| Capital | the account used to summarize the owner’s equity in a business |
| Credit | an amount recorded on the right side of a T account |
| Expense | a decrease in owner’s equity resulting from the operation of a business |
| Financial statements | financial reports that summarize the financial condition 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 |
| Proprietorship | a business owned by one person |
| 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 |
| T account | an accounting device used to analyze transactions |
| 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 |
| Normal balance | the side of the account that is increased |
| Chart of accounts | a list of accounts used by a business |
