| A | B |
|---|
| account | Subdivision under the three sections of the accounting equation used to summarize increases and decreases in assets, liabilities, and owner's equity. |
| accounting equation | The basis for keeping all accounting records in balance: Assets = Liabilities + Owner's Equity |
| accounts payable | The amount of money owed to the creditors of a business. |
| accounts receivable | The total amount of money owed to a business. |
| assets | Property or items of value owned by a business. |
| business transaction | A business event, such as the buying, selling, or exchange of goods, that cause a change in the assets, liabilities, or owner's equity of a business. |
| credit | Anagreement to pay for a purchase at a later time; an entry to the right side of a T account. |
| creditor | A person or business that has a claim to the assets of a business; a person or business to which money is owed. |
| equity | The total financial claims to the assets, or property, of a business. |
| expense | The cost of the goods or services that are used to operate a business; expenses decrease owner's equity. |
| financial claims | Legal rights to an item. |
| investments | Those assets owned by a business but not used in the operation of the business. |
| liabilities | Amounts owed to creditors; the claims of creditors to the assets of the business. |
| on account | When a business or individual buys an item on credit. |
| owner's equity | Owner's claims to the assets of the business. |
| property | Items of value that are owned or controlled by a business; economic resources of a business. |
| property rights | Creditors' and owners' financial claims to the assets of a business. |
| revenue | Income earned from the sale of goods and services. |
| withdrawal | The removal of cash or another asset from the business by the owner for personal use. |
