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Related Flashcards
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Cards In This Set
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Account
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A separate record used to summarize changes in each asset, liability, and owner's equity of a business.
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Account title
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Provides a description of the particular type of asset, liability, owner's equity, revenue, or expense.
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Accounting equation
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The accounting equarion consists of the three basic accounting elements: assets = liabilities + owner's equity.
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Accounting period concept
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The concept that income determination can be made on periodic basis.
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Accounts payable
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An unwritten promise to pay a supplier for assests purchasedor services received.
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Accounts receivable
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An amount owed to a business by its customers as a result of the sale of goods or services.
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Asset
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An item that is owned by a business and will provide future benefits.
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Balance sheet
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Reports assets, liabilities, and owner's equity on a specifice date. It is called a balance sheet because it confirms that the accounting equation is in balance.
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Business entity
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An individual, association, or organization that engages in economic activities and controls specific economic resources.
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Business entity concept
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The concept that nonbusiness assests and liabilities are not included in the business entity's accounting records.
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Business transaction
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An economic event that has direct impact on the business.
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Capital
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Another term for owner's equity, the amount by which the business assest exceed the business liabilities.
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Drawing
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Withdrawals that reduce owner's equity as a result of the owner taking cash or other assets out of the business for personal use.
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Expenses
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The decrease in assets (or increase in liabilities) as a result of efforts to produce revenues.
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Fiscal year
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Any accounting period of 12 months' duration.
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