Vocabulary
The process of planning, recording analyzing and interpreting financial information is called?
Accounting
Determine the account classification:
Cash
Asset
Determine how the following transaction impacts each account within the accounting equation:
Paid cash for supplies
Cash (decrease asset)
Supplies (increase asset)
What is the equation to determine personal net worth?
Assets - Liabilities = Net Worth
What is a service business?
A business that performs an activity for a fee
Determine the account classification:
Capital
Owner's Equity
Determine how the following transaction impacts each account within the accounting equation:
Received cash as an investment by owner
Cash (increase asset)
Capital (increase owner's equity)
Why is accounting called the language of business?
Accounting provides financial information to everyone who needs it to make good business decisions.
Anything of value that is owned is called?
An asset
Determine the account classification:
Supplies
Asset
Determine how the following transaction impacts each account within the accounting equation:
Bought land on account from Landy Co.
Land (increase asset)
Accounts Payable- Landy Co. (increase liabilities)
What must be done if a transaction increases the left side of the equation?
The right side must also be increased.
What is your personal net worth?
The difference between personal assets and personal liabilities
Determine the account classification:
Drawing
Owner's Equity
Determine how the following transaction impacts each account within the accounting equation:
Paid cash for rental of warehouse
Cash (decrease asset)
Rent Expense (decrease owner's equity)
What does the term on account mean?
Bought and Paid
Bought on account means buying items or services and paying for them at a future date.
Paid on account means providing items or services and getting paid for them at a future date.
A planned process for providing financial information
that will be useful to management is called?
An accounting system
Determine the account classification:
Accounts Receivable
Accounts Payable
Asset
Liability
Determine how the following transaction impacts each account within the accounting equation:
Sold services on account to Park Ave Group
Revenue (increase owner's equity)
Accounts Receivable- Park Ave Group (increase assets)
How is owner’s equity affected when cash is paid for an expense
Decreases owner's equity