Accounting Terms 1
The money a business owes to its suppliers, vendors, or creditors for goods or services bought on credit.
Accounts Payable
It's income generated when a firm sells goods or services.
Revenue
All the assets of a company that are expected to be sold or used as a result of standard business operations over the next year.
Current Assets
Income Statement is also known as _____________.
Profit and Loss Account
The Cash Flow Statement has ________ parts.
Three
It's the financial obligations of the firm to outsiders.
Liabilities
The money owed to a business, typically by its customers, for goods or services delivered.
Accounts Receivable
A company's long-term investments for which the full value will not be realized within the accounting year.
Non-Current Assets
The amount an individual or business earns after subtracting deductions and taxes from gross income.
Net Income
It refers to earnings or expenditures on long-term assets, such as equipment and facilities
Investing Activities
An accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy.
Depreciation
Resources with economic value which companies expect to provide future benefits.
Assets
Owner's Equity = $30,000 Liability = $20,000
Asset = ???
$50,000
The total cost of producing the goods sold by a business.
Cost of Goods Sold
The cash flows between a company and its owners and creditors from activities such as issuing bonds, retiring bonds, selling stock or buying back stock.
Financing Activities
The costs of conducting business.
Expenses
It represents owners' wealth.
Equity
Company earnings, or profit, which a business pays to its shareholders as a reward for their investment in its equity.
Dividends
The profit businesses make after subtracting the costs related to supplying their services or making and selling their products.
Gross Profit
It include cash receipts from goods sold, payments to employees, taxes, and payments to suppliers.
Operating Activities
Financial statement providing a snapshot of an organizations’ liabilities, assets, and shareholders’ equity at specific moments in time.
Balance Sheet
A type of bookkeeping system that keeps the accounting equation Assets = Liabilities + Equity in balance.
Double-Entry Bookkeeping
Asset = $25,500 Liabilities = $12,800
Owner's Equity= ???
$12,700
Net Income= $800 Total Expense= $300 Cost of Goods Sold= $500
Sales=???
$1,600
Opening Cash Balance= $6,000 Cash Flow from Operating Activities= $5,000 Cash Flow from Investing Activities= ($3,500) Cash Flow from Financing Activities= ($500)
Closing cash balance= ???
$7,000