Accounting Chapter 1 Vocabulary

Question 1

A sale for which cash will be received at a later date.

Accepted Answer

sale on account

Question 2

Generally Accepted Accounting Principles or standards/rules accountants follow to record & report financial activities

Accepted Answer

GAAP

Question 3

The use of ethics in making business decisions

Accepted Answer

business ethics

Question 4

The difference between personal assets and personal liabilities.

Accepted Answer

personal net worth

Question 5

Amount remaining after the value of all liabilities is subtracted from the value of all assets

Accepted Answer

owner's equity

Question 6

The difference between the increases and decreases in an account or simply the amount in an account.

Accepted Answer

account balance

Question 7

Assets taken out of a business for the owner's personal use.

Accepted Answer

withdrawals

Question 8

A formal written document that describes the nature of a business and how it will operate.

Accepted Answer

business plan

Question 9

An amount owed by a business.

Accepted Answer

liability

Question 10

A business owned by one person.

Accepted Answer

proprietorshop

Question 11

Anything of value that is owned.

Accepted Answer

asset

Question 12

Financial reports that summarize the financial conditions and operations of a business.

Accepted Answer

financial statements

Question 13

A planned process designed to compile financial data and summarize the results in accounting records and reports.

Accepted Answer

accounting system

Question 14

A record summarizing all the information pertaining to a single item in the accounting equation

Accepted Answer

account

Question 15

Financial rights to the assets of a business.

Accepted Answer

equities

Question 16

Planning, recording, analyzing, and interpreting financial information.

Accepted Answer

accounting

Question 17

The account used to summarize the owner's equity in the business.

Accepted Answer

capital account

Question 18

The cost of goods or services used to operate a business. They decrease owner&#x27;s equity.

Accepted Answer

expense

Question 19

An increase in equity resulting from the sale of goods or services.

Accepted Answer

revenue

Question 20

A formal report that shows what an individual owns, what an individual owes, and the difference between the two.

Accepted Answer

net worth statement

Question 21

An equation showing the relationship among assets, liabilities, and owner's equity.

Accepted Answer

accounting equation

Question 22

A business that performs an activity for a fee.

Accepted Answer

service business

Question 23

The difference between assets and liabilities.

Accepted Answer

equity

Question 24

A person or business to whom a liability is owed.

Accepted Answer

creditor

Question 25

Principles of right and wrong that guide an individual in making decisions.

Accepted Answer

ethics

Question 26

The name given to an account.

Accepted Answer

account title

Question 27

A business activity that changes assets, liabilities, or owner's equity.

Accepted Answer

transaction

Accounting Chapter 1 Vocabulary

Questions 27

Accounting Chapter 1 Vocabulary

Questions 27