Important Terms
What is Expenses?
This report shows the amount of goods available for sale or raw materials owned.
What is Inventory Record?
These assets can be liquidated within one calendar year.
What is Current Assets?
Method of accounting that tracks cash flow in and out when transactions occur and does not consider when income earned or expenses incurred.
What is Cash Accounting?
The relationship between assets, liabilities and equity is a fundamental concept and best expressed through
What is Accounting Equation.
The most important accounting term that represents the amount of money a business receives over a period of time.
What is Revenue?
This statement is calculated by subtracting total expenses from total incomes to show net income.
What is Income Statement or Profit & Loss Statement?
Land is an example of this type of asset.
What is long term/fixed asset?
Method of accounting that records revenue and expenses when earned or incurred regardless when cash is exchanged.
What is Accrual Accounting?
The net worth is by subtracting assets and
What is liabilities.
Property that is owned but will not be converted to cash for at least a year or more.
What is Fixed Assets?
This record captures the amount of money that comes in and goes out in a business.
What is Cash Flow Statement?
Trademark is this type of asset.
What is intangible assets?
A company sells their vegetable crop to a Co-op in August and receives payment in September. The company records the transaction in September. This is an example of what type of accounting?
What is Cash Accounting?
Revenue accounts are accounts related to ______ earned.
What is Income
This reduces a business's equity.
What is liability?
This record is a snapshot of time freezing the accounts listed in a moment in time to report net worth.
What is a Balance Sheet?
This should equal liabilities plus equity.
What is assets?
This accounting method allows for some flexibility for tax planning.
What is Cash Accounting?
The Net Income from the income statement is reported as cash on this statement.
What is Cash Flow?
What is Equity?
This record is a summary of a business's assets and liabilities and is referred to as a net worth statement.
What is Balance Sheet?
Does this company have positive or negative equity-
Land $500,000, Initial investment $50,000, crop inventory $25,000, Bank Loan $300,000, equipment $100,000, Equipment financing $50,000
What is Positive Equity.
Provides a more accurate picture of financial health by recognizing obligations when they occur.
What is Accrual Accounting?
This statement is a source of information for preparing the company's financial statements including balance sheet, income statement, and cash flow statement.
What is General Ledger?