The amount remaining after the value of all liabilities is subtracted from the value of all assets. Accounting equation An equation showing the relationship among assets, liabilities, and owner’s equity. Ethics The principles of right and wrong that guide an individual in making decisions. Business ethics

A amount owed by a business.

Owner’s equity

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

Accounting equation

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

Ethics

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

Business ethics

The use of ethics in making business decisions

Transaction

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

Account

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

Account title

The name given to an account.

Account balance

The amount in an account.

Capital account

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

Revenue

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

Sale on Account

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

Expense

A decrease in owner’s equity.

Withdrawls

Assets taken out of business from owner’s personal use.

personal net worth

The difference between personal assets and personal liabilities.

equity

The difference between assets and liabilities.

business plan

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

GAAP

Generally accepted accounting principles. The rules and standards that accountants follow while recording and reporting financial activities.

creditor

A person or a business to whom a liability is owed.

T account

An accounting device used to analyze transactions

 

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