Asset, Liab or Equity
Cash
What is an asset?
Recording purchases at what you paid for it.
What is the cost principle?
Revenues minus expenses
What is the income statement?
The accounting equation
What is assets equal liabilities plus equity?
Purchasing equipment for cash.
What is debit equipment, credit cash?
Prepaid Insurance
What is an asset?
Record revenue when services are rendered.
What is the revenue recognition principle?
Beginning retained earnings, plus net income, minus dividends.
What is the statement of retained earnings?
The term for the earnings that the company still has in the business.
What is retained earnings?
Bought supplies on credit.
What is debit supplies, credit accounts payable?
Utilities expense
What is equity?
What is the full disclosure principle?
Assets, liabilities and equity.
What is the balance sheet?
The four components of equity.
What is common stock, dividends, revenue, and expenses?
Received cash from a customer who purchased items on credit 1 month ago.
What is debit cash, credit accounts receivable?
Dividend
Expenses are recognized when incurred.
What is the matching principle?
This information on these 2 statements is presented over a period of time.
What is the income statement and statement of retained earnings?
A listing of all of the accounts and all of the activity flowing through them.
What is the general ledger?
Received money for tuition before the beginning of the school year.
What is debit cash, credit unearned revenue?
Unearned Revenue
What is a liability?
A truck bought for the business is recorded in the books of the business.
What is the business entity assumption?
The statement is presented as of a certain point in time.
What is the balance sheet?
The document shows only the ending balance in all the accounts. It is used to prepare the financial statements.
What is the trial balance?
Paid rent 3 months in advance.
What is debit prepaid rent, credit cash?