Vocabulary Terms
The Accounting Equation
Balance Sheets
Transactions
Owner's Equity
100
The amount remaining after the value of all liabilities is subtracted from the value of all assets
What is owner's equity?
100
The accounting equation
What is assets equals liabilities plus owner's equity?
100
The heading of a balance sheet
What is the company name, "Balance Sheet", and the date
100
Received cash on account from Kids Time, $400
What is increase cash for $400, decrease Accounts Receivable, Kids Time by $400
100
A sale on account changes owner's equity by...
What is increasing owner's equity?
200
A business activity that changes assets, liabilities, or owner's equity
What is a transaction?
200
Received cash from owner as an investment, $10,000 (how is the accounting equation changed)
What is increasing the assets by $10,000 and increasing the owner's equity by $10,000
200
The general setup for the balance sheet
What is assets in the left hand column an liabilities and owner's equity in the right hand column?
200
Sold services on account to Jim Smith, $550
What is increase Accounts Receivable, Jim Smith by 550 and Capital by 550
200
Expenses change owner's equity by...
What is decreasing the owner's equity?
300
A financial statement that reports assets, liabilities, and owner's equity on a specific date
What is a balance sheet?
300
Paid cash for supplies, $250 (how is the accounting equation changed)
What is increasing supplies for 250 and decreasing cash for 250?
300
The next step after all of the amounts are entered
What is totaling the columns to make sure they are equal?
300
Paid cash for telephone bill, $60
What is decrease cash by $60 and decrease Capital by $60
300
A business owner takes out money for their own use. This changes owner's equity by...
What is decreasing it via the drawing account?
400
A decrease in owner's equity resulting from the operation of a business
What is an expense?
400
Bought supplies on account, $398 (how is the accounting equation changed)
What is increasing supplies by $398 and increasing accounts payable by $398
400
When the totals are equal, you do this to show that they are finalized.
What is double ruling the totals?
400
Received cash from sales, $1500
What is increase cash by $1500 and increase capital b $1500
400
A withdrawal is different from an expense in terms of owner's equity because...
What is a withdrawal is not a result of the normal operations of a business?
500
An increase in owner's equity resulting from the operation of a business.
What is revenue?
500
The main rule for the accounting equation
What is the equation must always be equal?
500
If an error is found on the balance sheet, you do this to correct it.
What is create a new balance sheet?
500
Paid cash to owner for personal use, $800
What is decrease cash by $800 and decrease capital by $800
500
The first account that is under the owner's equity heading when a business is created is called...
What is owner's name, capital?
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