THE ACCOUNTING EQUATION

1
THE ACCOUNTING EQUATION
Lesson 1-1, page 7
2
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
Lesson 1-1, page 8
3
TERMS REVIEW
accounting records Organized summaries of a
businesss financial activities service business
A business that performs an activity for a
fee proprietorship a business owned by one
person
Lesson 1-1, page 8
4
TERMS REVIEW
asset Anything of value that is owned equities
Financial rights to the assets of a business
Lesson 1-1, page 8
5
TERMS REVIEW
liability An amount owed by a business owners
equity The amount remaining after the value of
all liabilities is subtracted from the value of
all assets
Lesson 1-1, page 8
6
TERMS REVIEW
accounting equation an equation showing the
relationship among assets, liabilities, and
owners equity.
Lesson 1-1, page 8