The Accounting Equation Flashcards

1
Q

A tangible or intangible resource that has economic value, owned by a person or organization.

A

Asset

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2
Q

A financial statement that marks a company’s financial situation at a moment in time, showing all assets, liabilities and owners’ equity.

A

Balance Sheet

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3
Q

The person or organization to whom a debt or obligation is owed.

A

Creditor

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4
Q

The financial claims on a company’s assets.

A

Equities

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5
Q

A debt or obligation owed to any other person or organization.

A

Liability

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6
Q

When money is given to an individual or business in exchange for future repayment of the principal amount plus interest.

A

Loan

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7
Q

The difference between an individual’s assets and liabilities.

A

Net Worth

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8
Q

A statement that shows the relationship between an individual’s assets, liabilities, and equity.

A

Net Worth Statement

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9
Q

The owner’s rights to the assets of a business after all liabilities have been paid.

A

Owners’ Equity

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10
Q

The equation showing the relationship between assets, liabilities, and owner’s equity of a company, shown as: Assets = Liabilities + Owners’ Equity

A

The Accounting Equation

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