Accounting Chapter 1 Vocabulary
Instructions: Cut & Paste the Definitions to the Vocabulary Words
1. accounting
2. accounting system
3. accounting records
4. financial statements
5. service business
6. proprietorship
7. asset
8. equities
9. liability
10. owner’s equity
11. accounting equation
12. ethics
13. business ethics
14. transaction
15. account
16. account title
17. account balance
18. capital
19. revenue
20. sale on account
21. expense
22. withdrawal
Vocabulary Word Definitions
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a business owned by one person
a business that performs an activity for a fee
a planned process for providing financial information that will be useful to
management
organized summaries of a business’s financial activities/records
planning, recording, analyzing and interpreting financial information
anything of value that is owned
financial rights to the assets of a business
an amount owed by a business
the amount remaining after the value of all liabilities is subtracted from the value
of all assets
Assets = Liabilities + Owner’s Equity
a business activity that changes assets, liabilities, owner’s equity
a record summarizing all the information pertaining to a single item in the
accounting equation
the name given to an account
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the amount in an account
the account used to summarize the owner’s equity in a business
assets taken out of the business for the owner’s personal use
a decrease in owner’s equity resulting from the operation of a business
a sale for which cash will be received at a later date
an increase in owner’s equity resulting from the operation of a business
the principles of right and wrong that guide an individual in making a decision
the use of ethics in making business decisions
financial reports that summarize the financial condition and operations of a
business
Notes:
Memorize:
Assets = Liabilities + Owner’s Equity
Know:
Definition of each part
Be Able to Label: Items as Assets, Liabilities or Owner’s Equity
Assets:
Cash, Accounts Receivable, Supplies, Prepaid Insurance
Liabilities:
Accounts Payable
Owner’s Equity
Capital and Drawing
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