• 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

·         financial reports that summarize the financial condition and operations of a business

Asset

anything of value that is owned

Equities

financial rights to the assets of a business

Liability

an 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

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

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

Account title

the name given to an account

Account balance

the amount in an account

Capital

the account used to summarize the owner’s equity in a business

Revenue

•  an increase in owner’s equity resulting from the operation of a business