1. Chapter One
Vocabulary

2. Assets = Liabilities + Owner’s Equity
Asset – anything of value that is owned
Liability – an amount owed by a business
Owner’s Equity – the amount remaining after the value of all liabilities is subtracted from assets
The accounting equation:
Assets = Liabilities + Owner’s Equity
Must ALWAYS be in balance.
The total of the amounts on the left side must always equal the total of the amounts on the right side.

3. Assets = Liabilities + OE. 3,000 8,000 10,000. 6,000 63,000 35,000

4. Transaction – a business activity that changes assets, liabilities, or owner’s equity
Account – a record summarizing all the information pertaining to a single item in the accounting equation
Account Title – the name given to an account
Account balance – the amount in an account
Capital – the account used to summarize the owner’s equity
Complete transactions 1-5 as a class.

5. Revenue – an increase in OE
Sale on Account – a sale for which cash will be received at a later date
Expense – a decrease in OE
Withdrawals – assets taken out of a business for the owner’s personal use
Complete transactions 6-11 together.