Terms
Also known as Capital
Owner's Equity
What is the Accounting Equation?
Asset = Liabilities + Owner's Equity
The owner invest cash in the business. What is the effect to the accounting equation?
Capital Increase
Financial obligations of the business.
Liability
Give one example of asset.
Cash, Building, Land, Accounts Receivable, Intangible Assets, Equipment, etc.
The owner received cash from bank loan.
Asset Increase
Liability Increase
It is the residual interest of the business.
Capital or Owner's Equity
What is the expanded formula for Accounting Equation?
Asset = Liability + Capital (Revenue - Expense)
The owner purchased equipment with cash.
Asset Decrease (Cash)
Anything of value that is owned by the business.
Asset
Net Income.
Which of the following will cause the Capital to decrease? (Revenue, Investment, or Withdrawal)
Withdrawal
It is the process of identifying, recording, analyzing and interpreting financial information.
Accounting
Accounts Payable is an example of __
Liabilities
A decrease in Owner's Entity resulting from the operation of a business is called __.
Expenses