College Accounting Ch.2

Front 1

Account

Back 1

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

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Accounts Payable

Back 2

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

Front 3

Accounts Receivable

Back 3

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

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Account Title

Back 4

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

Front 5

Accounting Equation

Back 5

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

Front 6

Accounting Period Concept

Back 6

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

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Asset

Back 7

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

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Balance Sheet

Back 8

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.

Front 9

Business entity

Back 9

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

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Business Entity Concept

Back 10

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

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Business Transaction

Back 11

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

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Capital

Back 12

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

Front 13

Drawing

Back 13

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

Front 14

Expenses

Back 14

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

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Fiscal Year

Back 15

Any accounting period of twelve months' duration.

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Income Statement

Back 16

Reports the profitability of business operationsfor a specific period of time.

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Input

Back 17

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

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Liability

Back 18

Something owed to another business entity.

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Liquidity

Back 19

A measure of the ease with which an asset will be converted to cash.

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Net Income

Back 20

The excess of total revenues over total expenses for the period.

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Net Loss

Back 21

The excess of total expenses over total revenues for the period.

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Net Worth

Back 22

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

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Notes Payable

Back 23

A formal written promise to pay a supplier of lender a specified sum of money at a definite future time.

Front 24

Operating Statement

Back 24

Another name for the income statement, which reports the profitablity of business operations for a specific period of time.

Front 25

Output

Back 25

the financial statements are the output of the accounting information system.

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Owner's Equity

Back 26

The amount by which the business assets exceed the business liabilities.

Front 27

Processing

Back 27

Reconizing te effect of transactions on the assets, liabilities, owner's equity, revenues, and expense of a business.

Front 28

Profit and Loss Statement

Back 28

Another name for the income statement, which reports the profitability of a business operations for a specific period of time.

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Revenues

Back 29

The amount a business charges customers for products sold or services preformed.

Front 30

Statement of Financial Condition

Back 30

Another name for the balance sheet, which reports assets, liabilities,and owner's equity on a specific date.

Front 31

Statement of Financial Position

Back 31

Another name for the balance sheet, which reports assets, liabilities, and owner's equity on a specific date.

Front 32

Statement of Owner's Equity

Back 32

Reports beginning capital plus net income less withdrawals to compute ending capital.

Front 33

Withdrawals

Back 33

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