Accounting Basics Vocabulary
Accounting Equation - Assets= Liabilities + Owner's Equity
Financial Statements - Documents that summarize the changes resulting from business transactions that occur during an accounting period.
Accounts Receivable - The total amount of money owed to a business....
Financial Statements - Documents that summarize the changes resulting from business transactions that
occur during an accounting period.
Accounts Receivable - The total amount of money owed to a business.
Accounting - The systematic process of recording and reporting the financial position of a person or an
organization. The accounting system is designed to collect, record, and report financial transactions that
affect the operation of a business.
Accounts Payable - Represents the short-term liabilities that a business owes to creditors.
Assets - Property and other items of value owned by a business. (They are either current or fixed)
Balance Sheet - A report of the balances in all assets, liability, and owner's equity accounts at the end of
an accounting period.
Cash Flows - The money that is available to a business at any given time.
Generally Accepted Accounting Principles (GAAP) - The general guidelines and principles, standards and
detailed rules, plus industry practices that exist for all accountants to use for financial reporting.
Income Statement - A report of the revenue, expenses, and net income or net loss over an accounting
period.
Liabilities - Creditors' claims to the assets of a business.
Equity - The present value of an asset less all claims against it.
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