ACCOUNTING 101
Anything owed by a business to an entity
What is a liability?
These are items owned that have monetary value
What are assets?
The cost of producing or acquiring goods that have been sold by a firm
What is cost of goods?
The accounting term often associated with "right" or "right-side"
What is a credit?
Income earned from the sale of goods or services
What is revenue?
Negative amounts in financial statements are represented by these
What are parentheses?
This line on the balance sheet refers to money owed by a company
What is accounts payable?
The financial document listing revenue less expenses = profit
What is an income statement?
Property or items of value owned by a business
What are assets?
Decreases both assets and owner's equity
What is withdrawal?
The most liquid asset of all
What is cash?
These entries increase expenses and assets
What are debits?
Total sales less cost of goods sold less operating expenses = ?
What is net income?
The owner's claim on a company's assets
What is equity?
In addition to an owner, these people also have claims against a company's assets
Who are creditors?
Anything owned by a business
What is an asset?
The term used to explain how quickly a company can convert assets into cash
What is liquidity?
Sales less the cost of goods sold
What is gross profit?
Formally promising to pay some of a company's resources to its owners
What is declaring a dividend?
Assets = Liabilities + ?
What is Owner's Equity?
These entries increase contributed capital, retained earnings and revenues and decreases an asset
What are credits?
This is the difference between total assets and total liabilities
What is owner's equity?
The financial document listing assets = liabilities less equity
What is a balance sheet?
Ongoing cost to operate a business
What are operating expenses?
An accounting method of recording profits when cash is received and recording expenses when they are paid
What is Cash-Basis accounting?