Show:
Accounting Terminology 1
Equations
Accounting Terminology 2
100
The costs of items or services used up in the routine operation of a business.
What are Expenses
100
$1000 of Revenue-$500 of Expense=
What is a Net Income
100
Expenses should be recorded and matched with the revenue they help to generate during the same accounting period.
What is matching principle?
200
The increase in owner's equity that results from the successful operation of a business.
What is profit
200
Salaries+Advertising+Utilities=
What is a Total expense
200
Require the definition and use of the same period of time for each accounting period.
What is time-period principle?
300
The difference between revenue and expenses when revenue is greater than expenses.
What is net income
300
Services performed and Paid for in Cash+Services performed on Credit=
What is Total Revenue
300
State that revenue is recognized at the time the revenue is definitely earned.
What is revenue recognition principle?
400
The amount earned from the sale of goods or services.
What is revenue
400
$500 of Revenue- $1000 of Expense=
What is a Net Loss
400
Recognized revenue and expenses only when cash changes hands.
What is cash basis of accounting?
500
The difference between revenue and expenses when revenue is greater then revenue
What is net loss
500
Total Revenue 1000 ______ Total Expense 500 ___ Net Income $500 ____ -----
What is an Income Statement
500
Match revenue earned with expenses incurred to produce that revenue during the accounting period.
What is accrual basis of accounting?