Accounting Principles Chapter 1

The form of balance sheet that resembles the basic format of the accounting equation, with assets on the left side and Liabilities and Owner’s Equity sections on the right side.

The liability created by a purchase on account.

A claim against the customer created by selling merchandise or services on credit.

An information system that provides reports to stakeholders about the economic activities and condition of a business.

Assets = Liabilities + Owner’s Equity.

The resources owned by a business.

A list of the assets, liabilities, and owner’s equity as of a specific date, usually at the close of the last day of a month or a year.

An organization in which basic resources (inputs), such as materials and labor, are assembled and processed to provide goods or services (outputs) to customers.

A concept of accounting that limits the economic data in the accounting system to data related directly to the activities of the business.

An economic event or condition that directly changes an entity’s financial condition or directly affects its results of operations.

Public accountants who have met a state’s education, experience, and examination requirements.

A business organized under state or federal statutes as a separate legal entity.

A concept of accounting that determines the amount initially entered into the accounting records for purchases.

Used to describe when revenues exceed expenses. (Also see net income and net profits)

Moral principles that guide the conduct of individuals.