Term
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Definition
| Planning, recording, analyzing, and interpreting financial data. |
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Term
| 2. 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
| What are accounting records? |
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Term
| What often contributes to business failures or bankruptcy? |
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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
| A business owned by one person. |
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Definition
| They rent office space and the instruments used to teach music lessons. |
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Term
| 8. Assets= liabilities = owners equity |
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Definition
| 8. Assets= liabilities = owners equity |
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Term
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Definition
| Anything of value that is owned. |
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Term
| What are some examples of assets? |
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Definition
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Term
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Definition
| Financial rights to the assets of a business. |
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Term
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Definition
| An amount owned by a business. |
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Term
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Definition
| The amount left over after subtracting liabilities from assets. |
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Term
13.
14. What is important to remember about the accounting equation? |
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Definition
| It must be balance in order to be correct. This means that the total of accounts on the left side of the equation must always equal the total of accounts on the right side. |
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Term
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Definition
| A financial statement that reports assets, liabilities, and owners equity on a specific date. |
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Term
| What are the three major sections of a balance sheet? |
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Definition
| 1. assets- located on the left side of the accounting equation, which means that assets ate also listed on the left side of the balance sheet.. 2. liabilities- located on the right side of the accounting equation, which means that liabilities are also listed on the right side of the balance sheet. 3. owners equity- located on the right side of the accounting equation, which means that owners equity is also listed on the right side of the balance sheet. |
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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 top three lines of the balance sheet; the name of the report ( balance sheet) and the date of the report. 2. prepare the assets section. Center the word " assets " column on the first line of the wide column on the left. Under this heading, write each asset account. 3. prepare the liabilities section. Center the word " liabilities on the first line of the wide column on the right. Under this write each liability account and amount. 4. prepare the owners equity section. Center the words " owners equity" on the next blank line under the liabilities section. Under this heading write the owners equity account title and amount. 5. add all the asset accounts. Add the liabilities and owners equity amounts. If the totals equal, the balance sheet is in 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 of the left side, write total assets and write the total asset amount under the single rule. On the right side, write the total liabilities and owners equity amount under the single rule. 8. rule double lines below the amount column totals. Double rules means that the totals have been verified as correct. |
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