Accounting Terms


The process of keeping track of a business' finances


Left side of the T-chart


Right side of the T-chart

Accounting Equation

Assets = Liabilities + Equity

Double entry method

Must be balanced - meaning both sides of the equation must be equal

Accounting Cycle

The process of recording and processing the accounting events of a company

Balance Sheet

A financial statement that provides information about a company's present condition

Income Statement

A financial tool that provides information about a company's past performance

Sole Proprietorship

business owned and operated by one person


a business organization owned by two or more persons who agree on a specific division of responsibilities and profits


An organization that is made up of many owners who are not normally in the decision-making and operations of the business, but they have an interest in the company


A business type that combines the benefits of partnership's flexibility and a corporation's protection


Any event or activity that can be measure in terms of money


An item of value owned by a company


obligations of the business to transfer something of value to another party


Indicates the value of a company to its owners