Term
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Definition
| Planning, recording, analyzing and interpreting financial information. |
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Term
| What is an accounting system? |
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Definition
| A planned process for providing financial information that will be useful to management. |
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Term
| What are accounting records? |
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Definition
| Organized summaries of business's financial activities. |
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Term
| What often contributes to business failures or bankruptcies? |
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Definition
| Inaccurate accounting records. |
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Term
| What is a service business? |
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Definition
| A business that performs an activity for a fee. |
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Term
| What is a proprietorship? |
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Definition
| A business owned by one person. |
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Term
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Definition
| They rent office space and the instruments used to teach music lessons. |
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Term
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Definition
| assets=liabilities+owner's equity |
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Term
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Definition
| Anything of value that is owned. |
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Term
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Definition
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Term
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Definition
| Financial rights to the assets of the business. |
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Term
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Definition
| An amount owed by a business. |
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Term
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Definition
| The amount left over after subtracting liabilities form assets |
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Term
| What is important about the accounting equation? |
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Definition
| It MUST be in balance in order to be correct. This means that the total of the accounts on the left side of the equation must always be equal to the total amounts on the right side. |
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Term
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Definition
| A transaction is a business activity that changes assets, liabilities and owner's equity. |
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Term
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Definition
| An account is a record summarizing all the information pertaining to a single item in the accounting equation. |
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Term
| What is an account title? |
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Definition
| The name given to an account. |
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Term
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Definition
| The cash account is used to summarize information about the amount of money the business has available. |
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Term
| What is an account balance? |
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Definition
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Term
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Definition
| The account used to summarize the account in a owner's business equity |
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Term
| What is Encore music's capital account called? |
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Definition
Barbra Trevino, capital
This account summarizes the owners equity in Encore. |
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Term
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Definition
| A financial statement that reports assets, liabilities, and owner's equity on a specific date. |
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Term
| What are the major sections of a balance sheet? |
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Definition
| the assets, liabilities and owner's equity |
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Term
| What are the steps to preparing a balance sheet? |
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Definition
1.Write the heading centered on the lines at the top of the balance sheet: the name of the business, the name of the report, and the date of the report.
2.Prepare the assets section. Center the word "Assets" on the first line of the wide column on the left write each asset account title and amount.
3.Prepare liabilities section. Center the word "Liabilities" on the first line of the wide column on the right. Under the heading Write each liability account title and amount.
4.Prepare owner's equity section. Center the words "Owner's Equity" on the next blank line under the liabilities section. Under this write the owner's equity account title and amount.
5.Add all the assets. All the liabilities. It totals are equal the balance sheet is balance. (correct)
6.Rule a single line across each amount column. A single line means that the amounts are to be added or subtracted.
7.On the next line write total assets on the left and total liabilities on the right.
8.Write down the totals and make sure they are correct. |
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