3.01/3.02 accounting vocabulary

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Accounting

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

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Asset

Back

Anything of value that is owned

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Liability

Back

An amount owed by a business

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Owner's equity

Back

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

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Accounting equation

Back

Shows the relationship among assets, liabilities, and owner's equity. It is most often stated as: Assets= Liabilities + Owner's Equity

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Transaction

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

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Account

Back

A record summarizing all the information pertaining to a single item in the accounting equation

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Account title

Back

The name given to an account

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Account balance

Back

The amount in an account

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Capital

Back

The account used to summarize the owner's equity in a business