Accounting Equation
What is the accounting equation?
Assets= liability+ owners equity(capital)
Why is the rule of debit and credit important in ones business?
Keeps accounting equation balanced
Information needed to record entries in the journal is obtain from _______?
Source documents
Does the heading of a balance sheet indicate a period of time or a point in time?
point in time
Balance sheet.
If the owner of a business puts money into the business, what account does it affect?
Owners Equity
What is the balance of a cash in bank account?
Debit
What are three part of a journal entry?
Date, credit, and debit
What is the main purpose of financial accounting?
Provide useful, financial information to outsiders.
typically cash or liquid assets being held or obtained for expenditures.
Capital
How do you find Net income?
Total revenues- Total Expense= Net Income
When a company receives payment what accounts should the company debit and credit?
Cash in bank and Accounts receivables
A _________ is the source document for cash received from transactions other than sales?
Receipt
What financial statement uses the expanded accounting equation?
Balance sheet
Recording transaction in a journal is known as
Journalizing
What is something that will decrease Owners Equity?
Net loss
What is the normal balance of expenses?
Debit
The source document for all cash payment is a _____?
Check
What financial statement displays the revenue and expenses of company for a period of time?
Income statement
the state of being responsible for something, especially by law.
liabilities
If total liabilities are $40,000 and owners equity is $60,000.What is the total amount of total assets?
Assets=$100,000
What transactions cause the Accounts payable accounts to Debit?
When account is gaining money.
What is a form describing the good or services sold, the quality, the price, and the terms of sale?
Invoice
What are the four main financial statements?
Balance sheets, Income statements, cash flow statements, statements of share holders equity
The main accounting record for a company or organization.
General ledger