Basics
This fundamental equation states what a business has in terms of income or loss.
Revenue - Expenses
These are items of value owned by a business, such as cash, inventory, or equipment
What is assets?
If a business has $50,000 in Assets and $20,000 in Liabilities, this is the amount of Owner's Equity.
What is $30,000
This is the "top line" of the income statement, representing the total amount of money earned from selling goods or services.
What is the revenue account?
If a business has $9,000 in revenue & $4,000 in expenses, this is what they are left with.
What is $5,000?
This fundamental equation states that everything a business owns is financed by either debt or the owner’s investment.
Assets = Liabilities + Owner's Equity
This specific asset represents money owed to the business by its customers who bought goods or services on credit.
What is accounts receivable?
If a business has $5,000 in assets & the owner's Equity comes to $500, this would be the Liabilities.
What is $4,500?
These are the costs of operating the business, such as rent, salaries, and advertising
What are the expense accounts?
If a business has $18,000 in revenue & $21,000 in expenses, this is what they are left with.
What is -$3,000?
The business activity that involves money, something that has value being exchanged for something that has value.
A transaction
This section of the balance sheet represents the owner's "claim" to the assets after all debts are paid.
What is owner's Equity?
A balance sheet provides a financial "________" of a company as of this specific point in time.
What is a "snapshot".
This occurs when a business’s total expenses are greater than its total revenue.
What is a net Loss?
Unlike the balance sheet, the income statement covers this time in their date section.
This type of accounting focuses on internal use of accounting information to aid in business decisions
What is management accounting.
On a balance sheet, liabilities are usually listed in this specific order.
What is the order in which they must be paid (Maturity)?
If a business has $12,000 in Cash, $5,000 in Inventory, and owes $7,000 to suppliers due next month, this is their total asset amount.
What is $17,000?
What is indenting each name?
A store sells $1000 worth of clothes & sells $500 worth of food in a month, but pays their employees $800, this is what they would be left with.
What is $700?
This type of accounting focuses on creating business statements for stakeholders to analyze.
What is Financial Accounting.
On a balance sheet, assets are usually listed in this order.
What is the order of liquidity?
If a business has $15,000 in supplies, $3,000 in bank loans, and another business owes us $5,000, this is their total liabilities amount.
What is $3,000?
The revenue accounts should be listed in this order AND the expense accounts should be listed in this order.
What is greatest to least AND what is alphabetical order?
A construction company has $5,000 in advertising to pay each month, plus their salaries they pay their employees of $4,000 but their money they bring in is $3,000, they are left with this.
What is -$6,000