Chapter 1 Terms

4. The principles of right and wrong that guide an individual in making decisions.
7. A business that performs an activity for a fee.
9. The process of planning, recording, analyzing, and interpreting financial information.
10. The difference between personal assets and personal liabilities.
11. The name given to an account.
13. Generally Accepted Accounting Principles. The standards and rules that accountants follow while recording and reporting financial activities.
15. Any business activity that changes assets, liabilities, or owner's equity.
17. A planned process designed to compile financial data and summarize the results in accounting records and reports.
22. The difference between assets and liabilities.
23. The amount remaining after the value of all liabilities is subtracted from the value of all assets.
24. Financial reports that summarize the financial condition and operations of a business.
25. A sale for which payment will be received at a later date.
27. Assets taken from the business for the owner's personal use.

1. An account used to summarize the owner's equity in a business.
2. A formal written document that describes the nature of a business and how it will operate.
3. An increase in equity resulting from the sale of goods or services.
5. The equation showing the relationship amount assets, liabilities, and owner's equity.
6. A business owned by one person.
8. A record that summarizes all the transactions pertaining to a single item in the accounting equation.
12. Financial rights to the assets of a business.
14. The difference between the increases and decreases in an account.
16. The cost of goods or services used to operate a business.
18. A person or business to whom a liability is owed.
19. A formal report that shows what an individual owns, what an individual owes, and the difference between the two.
20. Anything of value that is owned.
21. The use of ethics in making business decisions.
26. an amount owed