Name that Account
This account represents money owed by customers who purchased goods or services on credit.
Accounts Receivable
This is the basic accounting equation.
Assets=Liabilities + Shareholders Equity
This type of business has a single owner and is the easiest and cheapest to form.
Sole Propreitorship
This term refers to resources a company owns that provide future economic benefit.
What is an Asset
This financial statement reports a company's revenues and expenses over a period of time.
What is an Income Statement
This account represents money a company owes to suppliers for goods or services purchased on credit.
If a company has $60,000 in assets and $25,000 in liabilities, this is the amount of stockholders' equity.
What is $35,000?
This type of business is owned by two or more people who share in profits, losses, and management.
Partnership
This is the owners' residual claim on a company's assets after all liabilities are subtracted.
This is the account type for Notes Payable — Asset, Liability, or Equity?
What is a Liability
This asset account represents insurance coverage paid for in advance but not yet used up.
What is Prepaid Insurance
If a company has $40,000 in liabilities and $70,000 in stockholders' equity, this is the total amount of assets.
$110,000
This type of business is a separate legal entity from its owners, meaning owners have limited liability.
Coorperation
This term refers to a company's obligations owed to outside parties.
What are Liabilities
This financial statement reports a company's assets, liabilities, and equity at a single point in time.
This liability account represents cash received from a customer before the related good or service has been delivered.
What is Deffered Revenue
A company buys equipment for $8,000 cash. This is the effect on total assets.
+$8000, (Equipment Value)
-$8000 (Cash)
Overall No change
This term describes the tax disadvantage corporations face, where profits are taxed once at the corporate level and again when distributed to shareholders as dividends.
What is double taxation?
This set of standardized rules governs how U.S. companies must prepare and report their financial statements.
The GAAP, (Generally Accepted Accounting Principles)
This form of business ownership allows a company to raise capital most easily, since ownership can be divided into shares and sold to the public.
What is a Cooperation
This equity account represents the accumulated net income a corporation has kept since it began, minus any dividends paid out.
What is Retained Earnings
A company has $120,000 in assets and stockholders' equity of $45,000. This is the amount of total liabilities.
$75,000
Unlike a sole proprietorship or partnership, this business structure has an unlimited (continuous) life that doesn't end when an owner leaves or dies.
What is a Corporation?
This is the common description of accounting's role in business, referring to its function as a standardized way for businesses to communicate financial information.
What is "the language of business"?
A company received $2,000 cash from a customer for services to be performed next month. Name the two accounts affected and their account types.
Assets are increased (2000 cash)
Liabilites are Increased (2000 Unearned revenue)