Accounting Chapter 1

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

• Balance Sheet

• Income Statement

• Net Worth Statement

Planning, recording, analyzing, and interpreting financial information

• Accouting

• Finance

• Equity

An Equation showing the relationship among assets, liabilities, and owner's equity.

• Accounting Equation

• Net Worth Statement

• Liability

The Standards and Rules that accountants follow while recording and reporting financial activities.

• GAAP

• SAAP

• GRAP

The amount that remains after Liabilities are subtracted from Assets (think accounting equation).  

• Owner's Equity

• Assets

• Liability

Anything that is owned that has value

• Liability

• Equity

• Asset

Sale for which cash will be received at a later date.

• Accounts Payable

• Sale on Account

• Equity

Assets taken out of a business for the owner's personal use

• withdrawal

• revenue

• expense

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

• marketing plan

• business plan

• accounting plan

A business owned by one person

• Sole Proprietorship

• Corporation

• Partnership