Accounting 101
Provides financial information to users for making decisions.
What is Accounting?
These are items owned that have monetary value
What are assets?
It is anything of value that a person or business owns and therefore controls.
What is property?
What is Asset, Liability, Owners Capital
What is permanent accounts?
When a business buys a computer with cash, its cash ______, but its computer equipment ________
What decreases and increases?
This is the purpose of accounting.
What is to 1)identify, 2)record and 3)communicate financial information?
The way the fundamental accounting equation is stated.
What are Assets=Liabilities + Owner's Equity?
The business or person selling the item on credit, can be any person/business you owe money to.
Who is a creditor?
Formal report that shows what an individual owns, what an individual owes, and the difference between the two.
What is Net Worth Statement?
In addition to an owner, these people also have claims against a company's assets.
Who are creditors?
These represent the types of business organizations that use accounting.
What are 1)sole proprietorships, 2)partnerships and 3)corporations?
This line on the balance sheet refers to money owed by a company
What is Accounts Payable?
When you buy something and agree to pay for it later
What is Credit?
If a business closes, the claims of these individuals are settled first.
Who are creditors?
A business owned by one person.
What is proprietorship?
This is the difference between total assets and total liabilities.
What is Owner's Equity?
Property or items of value owned by a business
What is assets?
The principles of right and wrong that guide an individual in making decisions.
What are ethics?
This involves testing business records and procedures for accuracy.
What is auditing?
The term used to explain how quickly a company can convert assets into cash.
What is liquidity?
It is a legal right to property
What is a financial claim?
Is a list of all accounts used by a business.
What is chart of accounts?
Income earned from the sale of goods or services is called?
What is revenue?