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37 Cards in this Set

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Definition: Anything of value that is owned
Asset
What are the 3 types of business structures?
1) Sole Proprietorship
2) Partnership
3) Corporation
A business that is owned by 1 person is called a ________?
Sole Proprietorship
A business that is owned by 2 or more people is called a __________.
Partnership
A business that is owned by stockholders is called a _________.
Corporation
The financial rights to the assets of a business are called __________.
Equities or Owner's Equity
An amount owed by a business is called a ___________.
Liability
What is the formula to compute Owner's Equity?
Assets - Liabilities = Owner's Equity
What is the Accounting Equation?
Assets= Liabilities + Owner's Equity
Assets are located on what side of the accounting equation?
Left Side
Liabilities are located on what side of the accounting equation?
Right Side
Owner's Equity is located on what side of the accounting equation?
Right Side
What is another name for owner's equity?
Capital
What do we call a business activity that changes Assets, Liabilities, or Owner's Equity?
A Transaction
What do we call a record summarizing all the information that relates to a single item in the accounting equation?
An "Account"
The account name given to the account used to summarize the owner's equity in a business.
Capital
What do we call a financial statement that reports assets, liabilities, and owner's equity on a specific date?
A "Balance Sheet"
What are the 3 parts of the Balance Sheet Heading (in order as they are written at the top of the sheet)
1. Company Name
2. Name of the statement ( Balance Sheet)
3. Date
All assets appear on what side of the balance sheet?
Left side
All liabilities and owner's equity appear on what side of the balance sheet?
Right side
What must be true about the accounting equation after each transaction?
It must remain in balance
What is the name given to an account?
Account title
Examples: Cash, Supplies, Ben Furman capital, etc.
What is the dollar amount in an account called?
Account Balance
Are liabilities increased or decreased when a business buys supplies on account?
Liabilities are increased
How are liabilities affected when a business pays cash for a liability?
Liabilities are decreased because the business now owes less money
What do double lines below a column total mean?
Double lines mean that totals have been verified as correct.
Each transaction changes how many accounts in the accounting equation?
Each transaction changes at least 2 accounts.
When a transaction increases 1 side of the accounting equation, what must happen on the other side of the equation?
There must be an increase on the other side of the accounting equation as well.
When a transaction decreases 1 side of the accounting equation, what must happen on the other side of the equation?
The other side of the accounting equation must have a decrease as well.
When all changes occur on 1 side of the accounting equation, increases on that side must be matched with what?
Increases on one side of the equation must be matched with decreases of an equal amount.
What do we call an increase in owner's equity that results from the transactions of a business?
Revenue
What is often another term used to describe revenue?
Sales
What do we call goods and services needed to operate a business that result in a decrease in owner's equity?
Expenses
What is the term that we use when an owner takes money out of the business for his own personal use?
Withdrawals
Do withdrawals increase or decrease owner's equity?
Decrease Owner's Equity
Do sales or revenue increase or decrease owner's equity?
Increase
Do expenses increase or decrease owner's equity?
Decrease