Chapter 1

3. Cost of goods or services to operate a business
5. equity- Amount remaining after the value of liabilities subtracted from value of assets
7. system- Compile financial data and summarize results in accounting records and reports
10. net worth statement- Difference between personal assets and personal liabilities
12. business- Business that performs activities for a fee
16. Planning, recording, analyzing, and interpreting financial information
17. Assets taken from the business for the owners personal use
18. Difference between assets and liabilities
20. Amount owed
23. Generally accepted accounting principles
24. balance- Differences between the increases and decreases in an account
26. Activity that changes assets, liabilities, or owners’ equity
27. Financial rights to the assets of a business

1. ethics- Use of ethics in making business decisions
2. Increase in equity from sales of goods and services
4. plan-A formal written document that describes the nature of a business and how it operates
6. equation- Equation of the relationship among assets, liabilities, and owners’ equity
8. on account- Sale for which payment is received at a later date
9. Business owned by one person
11. worth statement- Reports that shows what an individual owns, owes, and the difference between the two
13. account- Account used to summarize owner’s equity in a business
14. Principles of right and wrong to guide individuals in decision making
15. Anything that is owned
19. statements- Summarizes the financial conditions and operations of a business
21. title- Name given to an account
22. Person or business to whom a liability is owed
25. Record that summarizes all the transaction pertaining to a single item in the accounting equation