1.

Accounting Equation - is considered to be the foundation of the double-

entry accounting system. It shows on a company's balance sheet whereby the total of
all the company's assets equals the sum of the company's liabilities and shareholders'
equity.
2. Asset - Things that are resources owned by a company and which have future economic
value that can be measured and can be expressed in dollars.
3. Capital - can also represent the accumulated wealth of a business, represented by its
assets less liabilities. It can also mean stock or ownership in a company.
4. Cash in Checking – company’s primary account used for operating activities. This is the
account used to deposit revenues and pay expenses.
5. Cash in Hand – any cash kept at retail store or in the office. This account helps you keep
track of the cash held outside a financial institution.
6. Classifying – sorting similar and related business transactions into 3 categories of
Assets, Liabilities and Owner’s Equity
7. Creditors – these parties needs financial info to determine the capacity of a business
organization to pay obligations
8. Current Asset - is a company's cash and its other assets that are expected to be
converted to cash within one year of the date appearing in the heading of the
company's balance sheet.
9. Entity Concept - states that the transactions associated with a business must be
separately recorded from those of its owners or other businesses.
10. Government – financial info is important for tax purposes.
11. Inventory - is merchandise purchased by merchandisers (retailers, wholesalers,
distributors) for the purpose of being sold to customers.
12. Liability - are defined as a company's legal financial debts or obligations that arise
during the course of business operations.
13. Long Term Asset – are not intended to be turned into cash or be consumed within one
year of the balance sheet date. Long-term assets include long-term investments,
property, plant, equipment, intangible assets, etc.
14. Manufacturing – production of items to be sold.
15. Partnership – owned and managed by two or more people who agree to contribute
money, property or industry to a common fund for the purpose of earning a profit.
16. Corporation – form of business organization managed by an elected board of directors.
17. Merchandising – buying and selling goods.
18. Investors – they want to know the financial position and results of operations of their
business investments.
19. Cash On Bank – A current asset account which includes currency, coins, checking
accounts, and undeposited checks received from customers. The amounts must be
unrestricted
20. Management – financial info is useful to the management for guidance for future
actions.