| A | B |
|---|
| accounting | planning, recording, anlyzing, and interpreting financial information |
| accounting system | planned process for providing financial information that will be useful to management |
| accounting records | organized summaries of a business's financial activities |
| service business | a business that performs an activity for a fee |
| proprietorship | also known as a sole proprietorship because it is a business owned by one person |
| asset | anything of value that is owned |
| equities | financial rights to the assets of a business |
| liability | an amount owed by a business |
| owner's equity | amount remaining after the value of all liabilities is subtracted from the value of all assets |
| accounting equation | an equation showing the relationship among assets, liabilities and owner's equity ASSETS = LIABITIES + OWNER'S EQUITY |
| transaction | business activity that changes assets, liabilities, or owner's equity |
| account | a record summarizing all the information pertaining to a single item in the accounting equation |
| account title | name given to an account |
| account balance | amount of money in an account |
| capital | account used to summarize the owber's equity in a business |
| balance sheet | a financial statement that reports assets, liabilities, and owner's equity on a certain date |
| 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 |
| expense | a decrease in owner's equity resulting from the operation of a business |
| withdrawals | assets taken out of the business for the owner's personal use |
| T Account | an accounting device used to analyze transactions |
| debit | an amount recorded on the left side |
| credit | an amount recorded on the right side |
| Normal balance | the side of the account that is increased |
| Chart of accounts | a list of accounts used by a business |
