Vocab
Anything of value that a person or business owns and therefor controls.
Property.
What is a Financial Claim ?
A legal right to an item.
Buying something and agree to pay for it later.
Credit.
The business or person selling you the item on credit.
Creditor.
The accounting term for the financial claim to these assets.
Equities.
The owners claim to the assets of the business.
Owners equity.
The creditors claims to the assets of the business.
Liabilities.
What is the accounting equation?
Liabilities+ Owner’s Equity= Property.
What is business Transaction?
An economic event that causes a change either an increase or decrease in assets liabilities or owners equity.
What is an account?
A subdivision under assets, liabilities,or owners equity.
Account Reeivable
The total amount of money owed to the business money that is to be received later because of the sale of goods or services.
What is an investment?
Money or other property paid out in order to make a profit.
What is Revenue ?
Income earned from selling goods or services.
What is an expense?
The cost of the products or services used to operate a business.