Vocabulary
Debts that are owed to creditors.
Liabilities
Accounts Payable is what type of account?
Liability
Owner contributed $1,000 to the business in exchange for capital.
Increase Asset (Cash)
Increase Equity (Owner, Capital)
A short-term liability that will be paid in the future.
Accounts Payable
Assets = Liabilities + Equity
Assets = $50,000
Liabilities = $20,000
Equity = ?
Equity is $30,000
Reports the net income or net floss of the business for a specific period.
Income Statement
(2 Answers)
Cash is what type of account?
Income is what type of account?
Cash is an asset
Income is equity
Received $500 cash for service revenue earned.
Increase Asset (Cash)
Increase Equity (Service Revenue)
The right to receive cash in the future from customers for goods sold or for services performed.
Accounts Receivable
Assets = Liabilities + Equity
Assets = ?
Liabilities = $45,000
Equity = $75,000
Assets is $120,000
The results of operations that occurs when total revenues are greater than total expenses.
Net Income
(3 Answers)
Accounts Receivable is what type of account?
Accounts Payable is what type of account?
Equipment is what type of account?
Accounts Receivable is an Asset
Accounts Payable is a Liability
Equipment is an Asset
Received utility bill of $150, which will be paid next month
Increase Liability (Accounts Payable)
Decrease Equity (Utility Expense)
Economic resources that are expected to benefit the business in the future. Something the business owns or has control of.
Assets
Assets = Liabilities + Equity
Assets = $75,000
Liabilities = ?
Equity = $50,000
Liabilities is $25,000
The owners claim to the assets of the business.
Equity
(4 Answers)
Owner Capital is what type of Account?
Rent Expense is what type of Account?
Inventory is what type of Account?
Office Supplies is what type of Account?
Owner Capital is Equity.
Rent Expense is Equity.
Inventory is an Asset.
Office Supplies is an Asset.
Paid $375 cash for salaries expense.
Decrease Asset (Cash)
Decrease Equity (Salaries Expense)
Reports on the assets, liabilities, and owners' equity of the business as of a specific date.
Balance Sheet
Assets = Liabilities + Equity (Owner, Capital - Owner, Withdrawal + Revenue - Expenses)
Assets = $150,000
Liabilities = $50,000
Owner, Capital = $60,000
Owner, Withdrawal =?
Revenues = $80,000
Expenses = $30,000
Owner, Withdrawal is $10,000
An examination of a company's financial statements and records.
Audit
(5 Answers)
Accounts Receivable is what type of Account?
Notes Payable is what type of Account?
Owner, Withdrawls is what type of Account?
Accounts Payable is what type of Account?
Land is what type of Account?
Accounts Receivables is an Asset.
Notes Payable is a Liability.
Owner, Withdrawals is Equity.
Accounts Payable is a Liability.
Land is an Asset.
Earned $750 for service revenue, but the customer has not paid yet.
Increase Asset (Accounts Receivable)
Increase Equity (Service Revenue)
The basic tool of accounting, measuring the resources of the business (what the business owns or has control of) and the claims to those resources (what the business owes to creditors and to the owner).
The Accounting Equation
Assets = Liabilities + Equity (Owner, Capital - Owner, Withdrawal + Revenue - Expenses)
Assets = $250,000
Liabilities = ?
Owner, Capital = $100,000
Owner, Withdrawal = $10,000
Revenues = $120,000
Expenses = $40,000
Liabilities is $80,000