Accounting Unit 2 Vocabulary

Front

A tangible or intangible resource that has economic value, owned by a person or organization.

Back

Asset

Front

A financial statement that marks a company's financial situation at a moment in time, showing all assets, liabilities and owners’ equity.

Back

Balance Sheet

Front

The person or organization to whom a debt or obligation is owed.

Back

Creditor

Front

A debt or obligation owed to any other person or organization.

Back

Liability

Front

The difference between an individual's assets and liabilities.

Back

Net Worth

Front

The owner’s rights to the assets of the business after all liabilities have been paid.

Back

Owner's Equity

Front

The equation showing the relationship between assets, liabilities, and owner’s equity of a company, shown as: Assets = Liabilities + Owners’ Equity

Back

The Accounting Equation

Front

A record in the accounting system that tracks the increases, decreases, and current balance of a specific asset, liability, equity, revenue, or expense.

Back

Account

Front

An account used to record the owner’s equity in a business.

Back

Capital Account

Front

A promise to pay for goods or services provided by an individual or organization at a later date.

Back

Purchase on Account