Asset
A company currency, coins, and checking account balances.
Cash
What is the basic accounting equation?
assets = liabilities + stockholders' equity
The amount received by the corporation at the time that the shares were issued (sold).
common stock
A consulting firm charges clients for strategic business advice. This is considered...
Service Revenue
Cost of advertising services during the period
Advertising Expense
A right to receive an amount as the result of delivering goods or services on credit.
Accounts Receivable
The amounts owed to suppliers for unpaid invoices
Accounts Payable
The portion of a company's net income that is kept within the company rather than distributed as dividends to shareholders. It is accumulated over time and used to reinvest in the business, pay down debt, or fund future growth.
Retained Earnings
A bakery earns $11,000 from selling wedding cakes. This is considered...
sales revenue
The costs associated with essential services such as electricity, water, gas, and heating that a company incurs during its operations.
utilities expense
The cost of the machinery and equipment used in the business.
Equipment
The amounts a company owes to its employees for work performed but not yet paid.
wages payable
Stockholders' equity accounts always begin with what number?
3
A law firm would earn what kind of revenue?
service revenue
The cost incurred by a company for leasing or renting property, such as office space or equipment, during a specific period.
rent expense
Items used in business operations that are consumed or utilized within a short period, such as office materials and cleaning products.
supplies
The amount of loan principal that is owed by the company.
notes payable
True or false: Once you make the chart of accounts, it will never change. IE there will be no additional accounts added.
False
American Eagle, a clothing store, earns what kind of revenue?
sales revenue
The cost incurred by a company for compensating its employees for their labor during a specific period.
salaries and wages expense
The goods and materials a company holds for the purpose of resale or use in production.
inventory
A check is written to pay a creditor for equipment purchased earlier on account. How is the liability account affected? (increase or decrease)
decrease
What two things must be included in the chart of accounts?
account name and account number
True or false: A company can only earn one kind of revenue, never two or more.
false
The cost of office, maintenance, or production supplies used during a specific period.
supplies expense