Accounts Payable Amounts a business owes for items or services purchased on credit not involving a promissory note. Account Numbers Numbers assigned to accounts according to the chart of accounts.

Amounts Owed to the Business

Accounts Payable

Amounts a business owes for items or services purchased on credit not involving a promissory note.

Account Numbers

Numbers assigned to accounts according to the chart of accounts.

Accounts

Categories under the Assets, Liabilities and Owner’s Equity headings.

Business Entity

A business enterprise that is separate and distinct from the person or persons who own it.

Chart of Accounts

Official list of account titles to be used to record transactions of a business.

Computerized Accounting

An accounting system that records transactions using a computer and accounting software.

Creditor

One to whom money is owed.

Double-Entry Accounting

The system by which each transaction is recorded in at least two accounts and the accounting equation is kept in balance.

Equity

The value of a right or claim to or financial interest in an asset or group of assets.

Fundamental Accounting Equation

Assets = Liabilities + Owner’s Equity

Manual Accounting System

An accounting system whereby transactions are recorded by hand.

Owner’s Equity

The owner’s right to or investment in the business.

Revenues

The amounts earned by a business.

Separate Entity Concept

The business is treated as a separate entity, separated from its owners, creditors and customers.

Sole Proprietorship

A one-owner business.

Accounting

Planning, recording, analyzing and interpreting financial information.

Accounting system

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

 

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