chap 2 and 3 Flashcards
(10 cards)
explain the diff between cash and credit transactions
cash transactions are when payment is made at the same time or immediately during a cash sale or or purchase. credit transactions are when payment is delayed or postponed during a credit sale or purchase
define assets
resources a business owns or controls that are expected to provide future benefits
state diff between nca and ca
nca provide benefits that last beyond one financial year. ca provide benefits that are used within one financial year
define liabilities
obligations owned by a business to others that are expected to be settled in the future
state diff between ncl and cl
ncl are due to be paid beyond one financial year. cl are due to be paid within one financial year
define equity / net assets
claim by owners on the net assets of a business
define income
amts earned from the activities of a business
define expenses
costs incurred in the same accounting period
basic accounting equation
total=total liab+total equity
expanded accounting equation
total assets=total liab+capital+(income-expenses)-drawings
