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Cards In This Set
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Accounting
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Method of reporting financial activity of a business
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Accounting Equation
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Assets = Liabilities + Owner's Equity
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Financial Statement
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Written report that describes the financial health of a company
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Examples of Financial Statements
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Balance Sheet, Income Statement, Statement of Change in Owner's Equity
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Balance Sheet
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Reports assets, liabilities, and owner's equity on a certain date
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Assets
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Anything of value OWNED by a business
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Liabilities
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Money OWED by the business
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Owner's Equity
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Net worth of the business
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Income Statement
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Reports the revenue, expenses and the net income (loss) of a business for the fiscal period.
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Revenue
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Amount of money that a company earns
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Expenses
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Costs of maintaining and operating a business.
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Fiscal Period
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Specific period of time covered by an accounting statement
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Statement of Change in Owner's Equity
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Reports the changes that have occurred in the owner’s equity account
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Accounting Activities
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•Recording daily transactions
•Preparing financial statements
•Paying bills
•Preparing payroll checks
•Preparing tax forms
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