| A | B |
|---|
| Assets | Resources used for the business |
| Liabilities | Obligations owed by the business |
| Owner's Equity | Claims on the business by the owner |
| Transaction | A financial event |
| Income Statement | Reports the income and expenses |
| Statement of Owner's Equity | Reports the owners claims on the business |
| Balance Sheet | Also called a statement of financial position |
| Financial Statements | Business documents that report financial information, |
| An owner's equity account | rent expense |
| A liability account | accounts payable |
| An asset account | accounts receivable |
| Entity Concept | a separate unit |
| Reliability Principle | use the most accurate data |
| Cost Principle | record at the actual cost |
| The accounting equation | Assets = Liabilities + Owner's Equity |
| Bookkeeping | A procedure in accounting |
| Accounting | The language of business |
| Sole Proprietorship | Owned by 1 person |
| Partnership | Owned by 2 or more persons |
| Corporation | Owned by stockholders |
