Accounting Terms 1-1

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

• financial statements

• liability

• net worth statement

• accounting

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

• balance sheet

• net worth statement

• financial statements

• asset

The difference between assets and liabilities.

• equity

• ethics

• proprietorship

• accounting system

A business that performs an activity for a fee

• proprietorship

• service business

• business ethics

• accounting system

A formal written document that describes the nature of a business and how it will operate.

• proprietorship

• business plan

• financial statement

• business ethics

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

• accounting system

• financial statement

• business plan

• net worth statement

Anything of value that is owned.

• liability

• asset

• equity

• net worth

An amount owed.

• liability

• asset

• equity

• ethics

A business owned by one person.

• equity

• proprietorship

• ethics

• service business

The use of ethics in making business decisions.

• ethics

• equity

• business ethics

• proprietorship