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

A planned process for providing financial information that will be useful to management.

The difference between personal assets and personal liabilities.

Financial reports that summarize the financial conditions and operations of a business.

The difference between assets and liabilities.

A business that performs an activity for a fee.

Financial rights to the assets of a business.

A business owned by one person.

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

An increase in owner’s equity resulting from the operation of a business.

Planning, recording, analyzing, and interpreting financial information.

An equation showing the relationship among assets, liabilities, and owner’s equity.

The principles of right and wrong that guide an individual in making decisions.

The account used to summarize the owner’s equity in the business.

An amount owed by a business.

A decrease in owner’s equity resulting from the operation of a business.

The name given to an account.

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

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

A sale for which cash will be received at a later date.

The use of ethics in making business decisions.

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

The standards and rules that accountants follow while recording and reporting financial activities.

A person or business to whom a liability is owed.

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

The amount in an account.

Payments for advertising, equipment repairs, utilities, and rent are liabilities.

When an owner withdraws cash from the business, the transaction affects both assets and owner’s equity.

A negative amount for net worth would reflect more debt than assets, something a creditor would favor.

The most common type of withdrawal by an owner from a business is the withdrawal of cash.

After each transaction, the accounting equation must remain in balance.

A transaction for the sale of goods or services results in a decrease in owner’s equity.

The accounting equation is most often stated as Assets + Liabilities = Owner’s Equity.

When two asset accounts are changed in a transaction, there must be an increase and a decrease.

Keeping separate financial records for a business and for its owner’s personal belongings is an application of the Business Entity accounting concept.

When items are bought and paid for at a future date, another way to state this is to say these items are bought on account.

A withdrawal is an expense.

Business ethics are the principles of right and wrong that guide an individual in making personal decisions.

Total assets are the amount the owner has invested in the business.

An expense is a decrease in owner’s equity resulting from the operation of a business.

Detailed information about changes in owner’s equity is needed by owners and managers to make sound business decisions.