Accounting Study Guide 1

The process of planning, recording, analyzing, and interpreting financial information. (p. 6)

• accounting

• account balance

• account title

• accounting equation

A planned process designed to compile financial data and summarize the results in accounting records and reports. (p. 6)

• accounting

• account balance

• accounting system

• accounting equation

Financial reports that summarize the financial condition and operations of a business. (p. 6)

• financial statements

• account balance

• net worth statement

• accounting equation

A formal report that shows what an individual owns, what an individual owes, and the difference between the two. (p. 7)

• business plan

• account balance

• financial statements

• net worth statement

Anything of value that is owned. (p. 7)

• liability

• asset

• capital account

• owner's equity

An amount owed. (p. 7)

• liability

• creditor

• GAAP

• revenue

The difference between personal assets and personal liabilities. (p. 7)

• business plan

• account balance

• personal net worth

• equities

The difference between assets and liabilities. (p. 7)

• asset

• equity

• proprietorship

• accounting equation

The principles of right and wrong that guide an individual in making decisions. (p. 8)

• GAAP

• accounting systems

• liability

• ethics

The use of ethics in making business decisions. (p. 8)

• business ethics

• equity

• asset

• financial statements