| A | B |
|---|
| Net worth | A company’s worth according to the balance sheet; also called book value |
| Owner’s equity | The amount an owner has invested in the business plus or minus profits and losses |
| Transaction | A business activity such as a sale, a purchase, or a return |
| Trial balance | The listing of a business’s different accounts and their current balances; used to check the accuracy of journal and ledger entries |
| Balance sheet | A financial statement that captures the financial condition of the business at that particular moment (assets and liabilities) |
| Accounting standards | Rules that accountants must follow when preparing financial statements |
| Accrual accounting method | A method of accounting that records transactions at the time they occur even if no money changes hands at the time |
| Credit | The arrangement by which businesses or individuals can purchase now and pay later |
