Accounting Flashcards

  1. Account
    A separate record used to summarize changes in each asset, liability, and owner's equity of a business.
  2. Account payable
    an unwritten promise to pay a supplier for assets purchased or services received.
  3. Accounts receivable
    An amount owed to a business by its customers as a result of the sale of goods or services.
  4. Account title
    Provides a description of the particular type of asset, liability, owner's equity, revenue, or expense.
  5. Accounting equation
    The accounting equation consists of the three basic accounting elements: assets = liabilities + owner's equity.
  6. Accounting period concept
    The concept that income determination can be made on a periodic basis.
  7. Asset
    An item that is owned by a business and will provide future benefits.
  8. Balance sheet
    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.
  9. Business entity
    An individual, association, or organization that engages in economic activities and controls specific economic resources.
  10. Business entity concept
    The concept that nonbusiness assets and liabilities are not included in the business entity's accounting records.
  11. Business transaction
    An economic event that has a direct impact on the business.
  12. Capital
    Another term for owner's equity, the amount by which the business assets exceed the business liabilities.
  13. Drawing
    Withdrawals that reduce owner's equity as a result of the owner taking cash or other assets out of the business for personal use.
  14. Expenses
    The decrease in assets (or increase in liabilities) as a result of efforts to produce revenues.
  15. Fiscal year
    Any accounting period of twelve months' duration.
  16. Income Statement
    Reports the profitability of business operations for a specific period of time.
  17. Input
    Business transactions provide the necessary input for the accounting information system.
Card Set
Accounting Flashcards
Ch. 2 Definitions