Accounting I - Chapter 1 Terms

The process of planning, recording, analyzing, and interpreting financial information

• Accounting

• Financial advising

• Accounting system

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

• Accounting system

• Financial statement system

• Accounting equation

Financial reports that summarize the financial condition and operations of a business

• Net worth statements

• Financial statements

• Source documents

A formal report that shows what an individual owns, what they owe, and the difference between the two

• Financial statement

• Net worth statement

• Asset & liability statement

Anything of value that is owned

• Asset

• Liability

• Expense

An amount owed

• Asset

• Liability

• Equity

The difference between personal assets and personal liabilities

• Personal net worth

• Equity

• Personal gross worth

In a business, the difference between assets and liabilities

• Personal net worth

• Equity

• Personal gross worth

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

• Ethics

• Business ethics

A business that performs an activity for a fee

• Service business

• Proprietorship

• Sole proprietorship