Terms
What is land considered?
Asset
What is the accounting equation?
assets = liabilities + equity
What is the main purpose of accounting?
to analyze and organize
What does a balance sheet consist of?
Assets, liabilities, and owner's equity
The amount of money in an account is called
Account Balance
What type of ratio is used for the formula current assets / current liabilities?
current
Accounting entries involve a minimum of how many accounts?
two
What does a bank reconciliation do?
a company's records are compared with its bank statements to make sure that the balances match.
What are 3 types of financial ratios?
liquidity, profitability, solvency
With regard to the inventory turnover ratio, the lower the ratio the better true or false
false
When cash is received, the cash account will change in what way
the cash account will increase
What does an income statement show?
a company's revenues, expenses, and net income or loss
What does LLC stand for?
Limited Liability Company
What is the term used for the equation cost / useful life in years?
Annual Amortization
Which account is the Accounts Receivable listed as?
An Asset
what is a cash flow statement?
Shows a company's cash and inflows and outflows
What measures a company's efficiency in managing inventory?
inventory turnover ratio
What is the name for the equation cost of natural resources / estimated units?
Depletion for natural resources
What is a business with only one owner called?
When a business owner receives a loan from the bank, what will happen to his cash account?
The cash account will increase