Accounting Flashcards

A separate record used to summarize changes in each asset, liability, and owner's equity of a business.

an unwritten promise to pay a supplier for assets purchased or services received.

An amount owed to a business by its customers as a result of the sale of goods or services.

Provides a description of the particular type of asset, liability, owner's equity, revenue, or expense.

The accounting equation consists of the three basic accounting elements: assets = liabilities + owner's equity.

The concept that income determination can be made on a periodic basis.

An item that is owned by a business and will provide future benefits.

Reports assets, liabilities, and owner's equity on a specific date. It is called a balance sheet because it confirms that the accounting equation is in balance.

An individual, association, or organization that engages in economic activities and controls specific economic resources.

The concept that nonbusiness assets and liabilities are not included in the business entity's accounting records.

An economic event that has a direct impact on the business.

Another term for owner's equity, the amount by which the business assets exceed the business liabilities.

Withdrawals that reduce owner's equity as a result of the owner taking cash or other assets out of the business for personal use.

The decrease in assets (or increase in liabilities) as a result of efforts to produce revenues.

Any accounting period of twelve months' duration.

Reports the profitability of business operations for a specific period of time.

Business transactions provide the necessary input for the accounting information system.