Transactions 1
This happens when cash is decreased by $200 and supplies is increased by $200.
What is Paid $200 cash for supplies?
This happens when cash is decreased by $1,000 and insurance is increased by $1,000.
What is Paid $1,000 cash for Insurance?
This is stated as Assets = Liabilities + Owner's Equity.
What is the Accounting Equation?
This is the process of planning, recording, analyzing, and interpreting financial information.
What is Accounting?
Anything of value that is owned by a business.
What is Asset?
This happens when the Owner's capital account is increased by $5,000 and cash is increased by $5,000 because of an investment.
What is Owner invests $5,000 cash in the business?
This happens when supplies is increased by $500 and the accounts payable - Staples account is increased by $500.
What is Bought Supplies on Account from Staples for $500?
This is a business that provides a service in exchange for money.
What is Service Business?
Financial reports that summarize the financial condition and operations of a business.
What is Financial Statements?
An amount that is owed to a vendor/business. Also known as a debt.
What is Liability?
This happens when cash is decreased by $1,000 and the owner's capital account is decreased by $1,000 because of payment for rent.
What is Paid cash for Rent expense $1,000?
This happens when cash is decreased by $500 and the accounts payable - Staples account is decreased by $500.
What is Paid cash on account to Staples for $500?
These are the standards and procedures that all accountants must follow in order to be in compliance with federal and state laws.
What is GAAP?
This is a financial record that shows your person assets, personal liabilities, and the difference between the two.
What is Net Worth Statement?
This is the difference between assets and your liabilities.
What is Owner's Equity?
This happens when cash is decreased by $600 and Owner's capital account is decreased by $600 because owner took money out for personal use.
What is Owner withdrawals cash from business, $600?
This happens when Owner's capital account is increased by $800 and Accounts Receivable - Tim Smith is increased by $800.
What is Sold Services on Account to Tim Smith for $800?
This account is affected when revenue is earned, expenses are paid, money is invested, or money is withdrawal.
What is Owner's Capital?
This is a record that summarizes all the transactions pertaining to a single item in the accounting equation.
What is Account?
The cost of goods or services used to operate a business.
What is an Expense?
This happens when Cash is increased by $500 and Accounts Receivable - Tim Smith is decreased by $500.
What is Received cash on account from Tim Smith $500?
This happens when cash is increased by $2,000 and Owner's Capital is increased by $2,000 due to the result of providing services for cash.
What is Received cash for sales for $2,000?
Another way to say you buy the product now, but pay back at another time.
What is Bought on Account?
This is when an owner takes money out of the business for personal use.
What is Withdraw?
A person or business to whom a liability is owed.
What is a Creditor?