Basic Terms
One owner
What is a sole proprietorship?
Accounting equation
What is:
Assets = Liabilities + Owners Equity?
Income earned from the sale of goods or services?
What is a revenue?
A business exist separate for the owner’s personal finances.
What is accounting principle of business entity?
More than one owner
What is a partnership?
Something owned by a company
What is an asset?
The price paid for goods and services used to operate a business
What is an expense?
A uniform period of time for reporting business financial information
What is an accounting period?
Owned by stockholders
What is a corporation?
Something owed
What is a liability?
Left side of a transaction
What is a debit?
Assumption that a business will survive and operate indefinitely
What is the accounting assumption of going concern?
A person who starts his own business
What is an entrepreneur?
An event that changes either an increase or decrease in an account
What is a transaction?
Increasing side of a liability
Which side is the credit side?
Two accounts
Every transaction involves at least how many accounts?
Money invested by the owner
Claim to the assets of a company
What is equity?
Money used for personal use by the owner
What is a withdrawal?
Debits = Credits
What is the equity of accounts?