Accounting Chapter 1 Vocabulary

The use of ethics in making business decisions.

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

The cost of goods or services used to operate a business.

Difference between the increases and decreases in an account.

Anything of value that is owned.

Financial reports summarizing the financial conditions of a business.

The difference between personal assets and personal liabilities.

Planning, recording, analyzing and interpreting financial information.

The amount remaining after the value of all liabilities is subtracted from the value of assets.

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

A planned process for providing financial information that will be useful to management.

The standards and rules that accountants follow.

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

Amount owed.

Financial rights to the assets of a business.

A business that performs an activity for a fee.

A business owned by one person.

Record that summarizes all transactions pertaining to a single item in the accounting equation.

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

A person or business to whom a liability is owed.

The name given to an account.

Assets taken from the business for the owner's personal use.

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

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

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

An equation showing the relationship among assets, liabilities and owners equity.

The difference between assets and liabilities.