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