If you want to buy illegal drugs on the street you must use this to buy it
What is cash
100
I receive a new carpet from the carpet company. I have to pay for the carpet in 30 days.
What is accounts payable?
100
Sam starts his company with an investment of $100,000 to the company
What is capital?
200
My lawn company does work for a customer. My customer will pay me for the work in 30 days.
What is accounts receivable?
200
This is very similar to an accounts payable except it lasts for a longer time period and includes interest
What is notes payable?
200
Tyrone goes to barnes and nobles and buys a book. Later that evening he decides he doesn't want the book and returns it to barnes and nobles
What is sales returns and allowance?
300
Sam paid one year's worth of insurance on January 1st.
What is prepaid insurance?
300
Sally is going out of the country for a year. She pays me $1,200 on December 31st. Sally says, "this is to cover you mowing my lawn for all of next year."
What is unearned revenue?
300
Sandy purchased her house for $100,000. After two years, she sells her house for $70,000.
What is a loss?
400
Sam is selling his company for $200,000. Harry paid $250,000 for the company. Harry paid $50,000 more than the company is worth.
What is goodwill?
400
ZZZ buys a building that costs $200,000. They borrow the $200,000 from the bank to pay for the building.
What is mortgage payable?
400
It toyota dealership purchases a new corolla for $5,000 which it will sell to customers for a higher price. The cost of the car to toyota is $5,000.
What is cost of goods sold?
500
ZZZ company sells all of its goods on credit. This means there are some customers that won't pay their bills. ZZZ estimates how much of its credit will not be collected.
Allowance for doubtful accounts
500
A company needs $1,000,000. It decides not to sell stock or borrow money from the bank. It obtains the $1,000,000 by promising to pay back the amount with interest over a period of time.
What is bonds payable?
500
ABC company buys a building for $100,000. Each year it expenses a $10,000 of price of the building on its income statement.