| A | B |
|---|
| accounting | planning, recording, analyzing, and interpreting financial information |
| accounting system | a 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 | 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 | the 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 |
| transaction | a 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 | the name given to an account |
| account balance | the amount in an account |
| capital | the account used to summarize the owner's equity in a business |
| balance sheet | a financial statement that reports assets, liabilities, and owner's equity on a specific date |
| business entity concept | a business's financial information is recorded and reported separately from the owner's personal financial information |
| unit of measure concept | when business transactions are stated in numbers that have common values |
| going concern concept | when financial statements are prepared with the expectation that a business will remain in operation indefinitely |
| generally accepted accounting principles (GAAP) | the standards and rules that accountants follow while recording and reporting financial activities |
