THE ACCOUNTING EQUATION :
2 LESSON 1-1 THE ACCOUNTING EQUATION page 8
TERMS REVIEW :
3 LESSON 1-1 TERMS REVIEW Accounting-planning, recording, analyzing, and interpreting financial information
Accounting system-a planned process for providing financial information that will be useful to management
Accounting records-organized summaries of a business’s financial activities
Financial statements-reports that summarize the financial condition and operations of a business
Service business-a business that performs an activity for a fee
Proprietorship-a business owned by one person page 9
TERMS REVIEW CONTINUED :
4 LESSON 1-1 TERMS REVIEW CONTINUED Asset-Anything of value
Equities-financial rights to the assets
Liability-an amount owed by a business
owner’s equity-the amount remaining after the value of all liabilites is subtracted from the value of all assets
accounting equation-Assets=Liabilities+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 page 9