Accounting 101
These are the 5 divisions of accounting.
What is Assets, Liabilities, Owner's Equity, Revenue, and Expenses?
These are items that belong to you (personal or professional).
What is an asset?
It is anything of value that a person or business owns and therefore controls. Also, considered a person's belongings and/or think real estate.
What is property?
These are the things you owe out.
What is a liability?
When a business purchases insurance with cash, its cash ......... and the insurance company gains an ........
This is the purpose of accounting.
What is to identify, record, and communicate financial information?
This is the way that the accounting equation is stated.
What is Assets= Liabilities + Owner's Equity?
The business or person selling the item on credit, can be any person/business you owe money to.
What is a creditor?
This is income earned or generated.
What is revenue?
This is the left side of a T account.
What is a debit?
These represent the types of business organizations that use accounting.
What is a sole proprietorship, partnership, and corporation?
The money owed by a company or owner.
What is accounts payable?
This is when you make a financial exchange with someone in a store, bank, restaurant, etc...also think deposit, withdrawal, expense.
What is a transaction?
When you buy something and agree to pay for it later.
What is credit?
This is the right side of a T-account.
What is a credit?
The acronym CPA stands for what in accounting?
What is a Certified Public Accountant?
This is the difference between total assets and total liabilities.
What is owner's equity?
Decreases both assets and owner's equity (think ATM).
What is a withdrawal?
Property or items of value owned by a business.
What is assets?
Advertising, Delivery, Insurance, Postage, Rent, and Telephone are all considered this.
What is expenses?
This involves testing business records and procedures for accuracy and/or someone who analyzes receipts and a company's bookkeeping.
What is auditing and/or auditor?
The term used to explain how quickly a company can convert assets into cash.
What is liquidity?
This is a device used to analyze debits and credits.
What is a T account?
Is a list of all accounts used by a business.
What is Chart of Accounts?
This is transferring information from a journal to a general ledger.
What is posting?