Acct. Fund. Chapter 1

A formal report that shows what an individual owns,

what an individual owes, and the difference between

the two.

• financial statements

• net worth statement

• business plan

• business plan

Planning, recording, analyzing, and interpreting financial

information.

• proprietorship

• service business

• accounting

• business plan

An equation showing the relationship among assets,

liabilities, and owner’s equity.

• accounting equation

• accounting system

• capital account

• service business

A business activity that changes assets, liabilities, or

owner’s equity.

• account balance

• revenue

• equity

• transaction

The standards and rules that accountants follow while

recording and reporting financial activities.

• GAAP

• ethics

• accounting equation

• personal net worth

The account used to summarize the owner’s equity in

the business.

• personal net worth

• proprietorship

• capital account

• asset

The amount remaining after the value of all liabilities is

subtracted from the value of all assets.

• owner’s equity

• proprietorship

• account balance

• account

A record summarizing all the information pertaining to a

single item in the accounting equation.

• liability

• expense

• asset

• account

Anything of value that is owned.

• liability

• asset

• owner's equity

• captial

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

• sale on account

• cash

• asset

• withdrawal