Ch 2 - Analyzing Bus Trans VOCAB Flashcards Preview

Principles of Accounting > Ch 2 - Analyzing Bus Trans VOCAB > Flashcards

Flashcards in Ch 2 - Analyzing Bus Trans VOCAB Deck (20):
1

Define accounts payable.

amounts a business must pay in the future

2

Define accounts receivable.

Claims for future collections for customers.

3

Define assets.

Property owned by a business

4

Define balance sheet. (2)

1. formal report on a business's financial condition on a certain date
2. reports the assets, liabilities and equity of the business

5

Define break even.

A point at which revenue equals expenses

6

Define business transaction.

a financial event that changes the resources of a firm.

7

Define capital. (2)

1. financial investment in a business
2. aka - equity

8

Define equity.

owner's financial interest in a business.

9

Define expense. (3)

1. outflow of cash,
2. use of other assets, or
3. incurring of a liability

10

Define fair market value. (2)

1. current worth of the asset
2. price the asset would bring if sold on the open market

11

Define fundamental accounting equation.

relationship between assets and liabilities plus owner's equity

12

Define income statement. (3)

1. formal report of business operations covering a specific period of time
2. aka: profit and loss statement
3. aka: statement of income and expenses

13

Define liabilities.

debts or obligations of a business

14

Define net income.

result of an excess of revenue over expenses

15

Define net loss

result of an excess of expenses over revenue

16

Define on account. (3)

1. arrangement to allow payment at a later date
2. aka: charge account
3. aka: open-account credit

17

Define owner's equity. (3)

1. financial interest of the owner of the business
2. aka: proprietorship
3. aka: net worth

18

Define revenue. (2)

1. inflow of money or other assets that results from the sales of goods or services or from use of money or property
2. aka: income

19

Define statement of owner's equity.

formal report of changes that occurred in the owner's financial interest during a reporting period

20

Define withdrawals.

funds taken from the business by the owner for personal use.