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11 Cards in this Set
- Front
- Back
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What is the purpose of accounting?
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To manage financial data and make smart financial decisions.
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What are the five-basic fuctions of accounting?
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1. Gather financial information
2. Prepare and collect records 3. Rearrange, summarize and classify 4. Prepare reports and summaries 5. Establish control |
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What are "liabilities"?
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Amount owed
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What are "assets"?
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Items of value
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what is "(personal) owners equity"?
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Networth
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What are the three types of accounting?
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Merchandising, Manufacturing, and Service
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What is the fundamental accounting equation?
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A=L+0.E.
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What is the "cost principle"?
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Goods and services will be listed at their historical cost and will never increase or decrease due to change in market value or worth
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What is a transaction?
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The exchange of items of value
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What is the "business entity principle"?
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Each business be considered a seperate entity from the owners personal finances
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What is the "maturity date principle"?
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Governs order of liabilities
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